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Herbalife (HLF) Says Unaware Of Any Regulatory Investigation

 February 04, 2013 02:02 PM
 


(By Balachander) Herbalife Ltd. (NYSE: HLF) has responded to a report that the distributor of nutritional supplements is the subject of a law-enforcement probe.

"Other than the voluntary dialogue with regulators, which we communicated on our January investor day, we are unaware of any other regulatory interest and/or investigation," Herbalife said.

The company said it is demanding a correction from the New York Post, which reported that Herbalife is the subject of ‘pending' probe by the Federal Trade Commission (FTC).

[Related -Herbalife Ltd. (HLF) Q3 Earnings Preview: What To Watch?]

The FTC, responding to a Freedom of Information Act request from the New York Post, released 192 complaints against the company over the past seven years.

Some contained a note referring to a "pending law enforcement action,", the Post reported.

"For a direct selling company of our size, we have had a relatively low number of complaints to the FTC," Herbalife said. "However, we take every one of them seriously and stand by our record of doing right by our distributors and all consumers of our products."

Late last year, Pershing Square's Bill Ackman had said the company is a pyramid scheme and disclosed he is shorting the stock. The company said it has been informed that Ackman has shorted its stock for the past 7 to 9 months and that the stock dropped almost 15 percent following Ackman's announcement.

[Related -How To Invest Like Bill Ackman]

Last month, Daniel Loeb's Third Point disclosed a 8 percent stake in the nutritional supplements company. Activist investor Loeb acquired 8.9 million HLF shares or 8.24 percent.

The stock, which has been trading in the 52-week range of $24.24 to $73.00, shed 2.31 percent to trade at $34.26 at 2.03 pm ET on Monday.

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