FTC Probe of Herbalife “Pending” — New York Post
CNBCThe Federal Trade Commission (FTC) released 192 complaints filed against Herbalife Ltd. (NYSE: HLF) over the past seven years in response to a Freedom of Information Act request filed by the New York Post. In an exclusive report today, the…
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The Federal Trade Commission (FTC) released 192 complaints filed against Herbalife Ltd. (NYSE: HLF) over the past seven years in response to a Freedom of Information Act request filed by the New York Post. In an exclusive report today, the Post says that some of the complaints “contained a note referring to a ‘pending law enforcement action’, [but] did not say whether the action was civil or criminal.”
Herbalife was the target of a detailed charge by Pershing Square Capital Management chief William Ackman that the company is a “pyramid scheme.” Ackman has built up a large short position in Herbalife stock, and while there are plenty of others who believe he is wrong — including activist investor Carl Icahn and hedge fund manager Dan Loeb — the threat that the FTC will take some action against the nutrition and weight-loss firm will send investors running for the exits.
Just a week ago the FTC announced an investigation into an unnamed illegal pyramid scheme, and shares of both Herbalife and Nu Skin Enterprises Inc. (NYSE: NUS) dived. Even the fact that the investigation did not ultimately involve either firm indicates how jittery investors are about multilevel marketing firms like Herbalife.
Shares of Herbalife are down about 10.3% in premarket trading this morning, at $31.40 in a 52-week range of $24.24 to $73.00. Nu Skin’s shares are down about 3.7%, at $40.26 in a 52-week range of $32.36 to $62.01.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
