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Top Herbalife members contacted by law enforcement agencies
[BENGALURU] US federal law enforcement agencies contacted several top Herbalife Ltd members last week for information about their own business practices, CNBC reported, citing sources familiar with the matter.
The inquiries are focused on the activities of about 10 top Herbalife members, CNBC said, citing sources. The company is offering members assistance in obtaining legal counsel, though it is unclear how many have taken representation, CNBC said.
The identities of the members and what law enforcement asked them is unclear, CNBC said.
In an emailed statement, Herbalife said it is cooperating with authorities on requests for information relating to trading of its shares and to its business practices. It did not comment on CNBC's report about the agencies contacting its top members but said it remained confident in the integrity of its business practices.
Hedge fund mogul William Ackman and his Pershing Square Capital Management LP have campaigned against Herbalife since December 2012, when they revealed a US$1 billion short bet against the Los Angeles-based company. Herbalife has long denied it is a pyramid scheme.
Federal and state regulators, including the Securities and Exchange Commission and the Federal Trade Commission, are investigating the company. "(We) are hopeful Ackman's long-term campaign of distortion will be found to be illegal," Herbalife spokesman Alan Hoffman said in the statement.
Last month, Herbalife won the dismissal of a lawsuit that claimed the maker of weight-loss and nutritional products fraudulently portrayed itself as a legitimate company, and that shareholders lost money because it was actually an illegal pyramid scheme.