See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Herbalife Ltd (HLF) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Herbalife Ltd (HLF) - free report >>
Image: Bigstock
Herbalife (HLF) to Settle Probe with Federal Trade Commission
Shares of Herbalife Ltd. (HLF - Free Report) rose 4.26% on May 24 closing after The New York Post reported that the company has reached an agreement with the Federal Trade Commission (FTC) to settle a years-long probe related to whether it is a pyramid scheme.
Per sources, Herbalife has agreed to pay a significant financial penalty. However, the terms haven’t been divulged. Also, the agreement has not been finalized yet and could still fall apart.
The FTC opened a probe into the company after hedge fund manager Bill Ackman alleged that Herbalife operated like a pyramid scheme, which involves making money by way of recruiting more salespeople rather than selling products. Such models are illegal because they eventually collapse once there are no more people to recruit.
The Los Angeles-based company has been under pressure from billionaire Ackman since 2012 when he made a $1 billion bet against the company, questioning its business practices.
The company, which sells weight-management products through a network of independent distributors who earn sales commissions, has been denying the charges from the very beginning. The company clarified that it operates like a multi-level marketing company similar to Nu Skin Enterprises Inc. (NUS - Free Report) , USANA Health Sciences Inc. (USNA - Free Report) and Avon Products Inc. .
Herbalife carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>