Home Business FTC – Herbalife Not A Pyramid Scheme, Pay Fine And Restructure (Video)

FTC – Herbalife Not A Pyramid Scheme, Pay Fine And Restructure (Video)

Page from Herbalife presentation book, used from at least 2009 through 2014. (FTC)

The nearly four-year battle between activist investor William Ackman and nutrition supplements company Herbalife came to a climax Friday when the Federal Trade Commission announced a $200 million settlement with the company, which also agreed to “fundamentally restructure” its compensation program so that “participants are rewarded for what they sell, not how many people they recruit.”

“But federal officials stopped short of calling the company a pyramid scheme and allowed it to keep operating,” NPR’s Jim Zarroli reports, although the FTC “had extremely tough words for Herbalife and made clear it sees many of its practices as deceptive.”

“Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices,” FTC chairwoman Edith Ramirez stated in a release announcing the settlement. She also spoke at a Webcast press conference archived here.

In the “Wall Street dogfight between two billionaire investors” — Ackman and Carl Icahn — Ackman “won a moral victory but Icahn won the war” in that the FTC “stopped short of shutting down the company,” Matthew Goldstein and Alexandra Stevenson posit for the New York Times. “Mr. Ackman had wagered big on Herbalife’s demise, while Mr. Icahn had been betting on its ultimate survival.”

Read the FTC report

By Thom Forbes, Mediapost, excerpt posted on SouthFloridaReporter.com July 20, 2016 

Herbalife agreed to pay $200 million and make sweeping changes to its business to settle U.S. claims that the nutrition company deceived consumers with get-rich-quick promises. Bloomberg’s Matt Townsend reports on “Bloomberg Markets.” (Via Inform.com)