Herbalife Is In Talks With The FTC
Herbalife is in talks with the FTC regarding a probe of the company’s business practices and said that the outcome of the talks are uncertain. Is the FTC finally going to take action? Can Herbalife fast talk their way out of this? It has been a long fight with many revelations about how Herbalife runs their business.
The FTC opened a probe of Herbalife following a report by Bill Ackman that highlighted they were running a possible Product-Based Pyramid Scheme.
Here is the key information from their 2/25/2016 10K Annual Report filed with the SEC:
As previously disclosed, the Company received from the U.S. Federal Trade Commission, or the FTC, a Civil Investigative Demand, or a CID, relating to the FTC’s confidential investigation of whether the Company has complied with federal law in the advertising, marketing, or sale of business opportunities. Pursuant to the CID, as supplemented, the FTC has requested from the Company documents and other information for the time period commencing January 1, 2009 to the present. The Company is currently in discussions with the FTC regarding a potential resolution of these matters. The possible range of outcomes include the filing by the FTC of a contested civil complaint, further discussions leading to a settlement which could include a monetary payment and other relief or the closure of these matters without action. The Company is cooperating with the investigation and at this time it is difficult to predict the timing, and the likely outcome, of these matters. Moreover, no assurances can be given that the outcome of these matters will not have a material adverse impact on the Company’s business operations, its financial condition or its results of operations. At the present time, the Company is unable to estimate a range of potential loss, if any, relating to these matters.
In my opinion, Herbalife is a scam.
Stephan Gratziani, a former top U.S. national cyclist, moved to France in 1989 to pursue his dream of racing professionally in Europe. “My dream was to become a professional and race in the Tour de France,” recalls Stephan, “After two and a half years of racing in Europe, I decided to end my cycling career.” Shortly afterwards, Stephan attended a Herbalife Opportunity Meeting (HOM) in Paris and joined Herbalife.
In the following video, Stephan Gratziani explains why the Herbalife business opportunity is a scam. He clearly lays out why it is a Product-Based Pyramid Scheme.