Herbalife settles pyramid scheme case with regulator, in blow to Pershing's Ackman

Pershing Square Says Herbalife (HLF) Changes Will Cause Pyramid to Collapse

Pershing Square Capital Management, L.P. (Pershing Square) today released the following statement:

Today, the FTC, in its complaint filed in Federal Court concluded[1]:

In sum, Defendants compensation structure incentivizes Distributors to purchase thousands of dollars of product to receive recruitingbased rewards and to recruit new participants who will do the same. This results in the overrecruitment of participants and the oversupply of Defendants products and exacerbates participants difficulty in selling Herbalife products for a profit.

Participants in a business opportunity should have some reasonable prospect of earning profits from reselling products to customers. However, most Herbalife... More

Herbalife (HLF) FTC Settlement a 'Total Defeat' for Short Camp; Sees Massive Short Squeeze - Pivotal's Ramey

Pivotal Research analyst Timothy Ramey reiterated a Buy rating and $90 price target on Herbalife (NYSE: HLF) after the company reached a long-awaited settlement with the FTC.

The company agreed to pay a $200 million fine to the FTC and $3 million to the Illinois Attorney General. The company will
adopt a two-tier membership structure a structure HLF floated in the Spring of 2013 as a possibility. It will need to show that 80% of product sales are to legitimate end users.

Ramey notes the FTC changes are... More

Herbalife (HLF) Grants Icahn Right to Raise Stake Up to 34.99%

With the FTC settlement, Herbalife (NYSE: HLF) announced that Carl Icahn... More

Herbalife (HLF) Enters Settlement with FTC; Board Grants Icahn Ability to Boost Stake to 34.99%

Herbalife Ltd. (NYSE: HLF) announced it has reached a settlement agreement with the Federal Trade Commission (FTC or the Commission) resolving the FTCs multi-year investigation of the Company. The terms of the settlement do not change Herbalifes business model as a direct selling company and set new standards for the industry. With the settlement agreement announced today, the FTCs investigation of Herbalife is complete.

Herbalife and the Illinois Attorney General also reached a settlement, and the Company agreed to pay $3 million as part of this separate agreement. With the conclusion of the... More