FBI reportedly opens criminal investigation into Herbalife

[mojper]

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Herbalife, a Los Angeles-based company that sells nutritional shakes and supplements through a network of millions of distributors, is now reportedly under criminal investigation by the Department of Justice and the Federal Bureau of Investigation. According to a story in the Financial Times, the inquiry is still in its preliminary phase, and no charges have been filed against the company. Herbalife, however, says that it is not aware of any DOJ or FBI investigation.

"We have not received any formal nor informal request for information from either agency," Herbalife says in a statement. "We take our public disclosure obligations very seriously." Herbalife says it does not plan to make additional statements on the alleged investigation until there are "material developments."

The reported DOJ and FBI investigation would follow a civil investigation opened by the Federal Trade Commission. Herbalife has become a battleground for several financial big shots. Hedge-fund manager Bill Ackman has publicly accused Herbalife of being a pyramid scheme and published several reports alleging fraud among the company's senior distributors. He has been opposed by several billionaires, including Carl Icahn, Dan Loeb, and George Soros, who threw their weight behind Herbalife's stock.

Both Ackman and Herbalife have spent heavily on lobbying in recent years, with Herbalife contributing far more in total. Neverthless it seems Ackman's public persistence is finally paying off, with Herbalife now facing investigation from no less than three government agencies.

Source: FBI reportedly opens criminal investigation into Herbalife | The Verge

Opinions?

[Samie8183]

IMO I'm not sure I would trust the site, multiple people had to point out typos and such.

[kay2473]

I've heard some good things about the products and it's all over facebook. I guess we will have to wait and see.

[kcarpenter]

I'm not a distributor for herbalife, but I am a Network Marketing professional. I don't see how Herbalife could be classified as a 'Pyramid Scheme' since they have great products that people want to buy. A 'Pyramid Sceme' doesn't have that. With a pyramid scheme, companies make their money by distributors selling start up packs, and there's not much in the way of product being sold to customers. I'm guessing whatever this was, will blow over, and Herbalife won't be found guilty of any wrong doing.

[fong47]

Isn't it herbalife has been around like a gazillion years? Now they figure it out?

[leapsponge]

Really? i have a lot of friend who use their products, most of them said that their products works great.

[bumphead]

I have heard this news. But there is still no strong evidence that can tell that Herbalife is guilty. Hope everything will turn out fine for them.

[TopMentor]

Good news is Herbalife settled this and it was deemed not a pyramid scheme which is absolutely correct. It would've been a really bad thing if it was because there would be a whole lot more companies that would be in trouble, but thankfully there was no merit to it.

[sneff3]

I wouldn't trust this site at all. I have used Herbalife in the past and the products are great!