Herbalife says FTC opens inquiry long sought by Ackman

by Rachel Baker on March 15, 2014

The U.S. Federal Trade Commission is investigating Herbalife and its operations.

Herbalife Ltd said on Wednesday that the U.S. Federal Trade Commission had opened an inquiry into its operations, news that briefly sent the nutrition and weight loss company’s share price down more than 16 percent.

Billionaire investor William Ackman, who has a $1.16 billion short bet on Herbalife, has for months called on regulators to investigate Herbalife’s distribution model, which he calls a “pyramid scheme,” where a company makes most of its money by recruiting new distributors rather than selling products to real customers.

Herbalife said it “will cooperate fully with the FTC.”

For more information, check out the website:
http://www.reuters.com/article/2014/03/12/us-herbalife-ftc-idUSBREA2B1KS20140312

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