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Why Is Herbalife Being Investigated By The FBI and FTC?

Herbalife, a Los Angeles based company, is being investigated by both the Federal Bureau of Investigation (FBI) and the Federal Trade Commission (FTC).

Why Is Herbalife Being Investigated By The FBI and FTC?

Why Is Herbalife Being Investigated By The FBI and FTC?The FBI and FTC are looking into Herbalife because they believe that the company may be part of a pyramid scheme.  The company has a direct selling business model that sells diet shakes and health products.

In order for Herbalife to show that it is operating within the law, they will need to prove that they earn most of their revenue from consumers.  If more of their profit is earned from recruiting people instead of sales, the company could face charges.

Why did the investigations start to begin with?  Bill Ackman, a hedge fund manager, had it in for the company.  He brought the company to the FBI and FTC for investigation because he believed their pyramid scheme was illegal.  Carl Icahn bet against Bill Ackman that Herbalife would survive any and all investigations, and soon after, investigations began.

As the products sold by the company are popular, many may be wondering if the investigation has anything to do with the product, and so far, it does not seem that there is any cause for concern with the products that Herbalife sells.

Photo courtesy of Facebook.

Why Is Herbalife Being Investigated By The FBI and FTC?

About Megan Cornelius

  • tex2

    Herbalife operates very similar to Amway, an even larger MLM scam. Google “stop the amway tool scam wordpress”

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