CALIFORNIA – The California based company is set to be investigated by the FTC. This comes after Hispanic groups have raised concerns about the multi-level marketing program the company works upon.
“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC,” the company said in a statement released Wednesday. “We are confident that Herbalife is in compliance with all applicable laws and regulations.”
The announcement put a pause in trading of Herbalife stock on Wall Street. Herbalife has been in the center of numerous marketing scandals including being called an ‘illegal pyramid scheme’. Up until today, Herbalife has dismissed any claims of operating an illegal pyramid scheme.
On Jan. 23rd, Senator Edward J. Markey, D-Mass., wrote to the Federal Trade Commission to ask that the agency “look into the business practices at Herbalife.”
James Angel, a Georgetown Business professor, told ABC News that in recent months, the market has fluctuated wildly on news about the company because there remains real uncertainty about which side is right – the company and its backers, or Pershing Square.
“There really is a mystery about this company,” Angel said. “And that’s what makes is so fascinating. Where you see the titans of Wall Street fighting it out over this mysterious company.”
Prior to today’s FTC developments, Herbalife President Des Walsh told ABC News that Wilkes’s views about the company are “mistaken” and have been based on misinformation.
For some, this is a long-awaited event that the FTC is investigating Herbalife. Maybe some closure or some new important information could appear that can shatter or confirm all of the drastic claims.