From FT Alphaville:
The FTC has opened an investigation into Herbalife [Update]
After we got in touch with the company to tell them we were writing this story, they halted trading and put out a statement confirming the investigation.
The Federal Trade Commission has opened a formal investigation into Herbalife, the multi-level marketing company that hedge fund manager Bill Ackman has called a pyramid scheme, according to people familiar with the situation.
The probe comes after a year of intense scrutiny of the Los Angeles based group, which sells nutritional shakes and supplements through and to a network of millions of independent distributors in more than 80 countries worldwide.
Herbalife said:
Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC. We are confident that Herbalife is in compliance with all applicable laws and regulations. Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the live and health of its consumers for over 34 years.Since Mr Ackman first aired his allegations in December 2012 and called on the FTC to investigate, that call has been echoed by consumer groups, a congressperson, a senator, and even an analyst supportive of the company who wished to clear the air....MORE
