Patrick T. Fallon, Bloomberg
The Justice Department and FBI have opened an investigation of Los Angeles nutritional products company Herbalife Ltd., which has been fighting critics who say it’s operating an illegal pyramid scheme.
Law enforcement sources confirmed the investigation. The FBI started looking into the company “more than several months ago,” said a person who has been briefed on the investigation.
“We are doing our job of getting to the bottom of this issue,” said the official, who asked not to be identified because the investigation is ongoing. “And I would stress that no one is going to be under arrest imminently. Maybe no one will be arrested.”
Shares of Herbalife Ltd. suffered their biggest loss in more than a year Friday after reports of the investigation surfaced. The stock plummeted $8.36, or 14%, to close Friday at $51.48; trading volume was heavy.
Herbalife said in a statement that it was unaware of the FBI probe, first reported by the Financial Times.
“We have no knowledge of any ongoing investigation by the DOJ or the FBI, and we have not received any formal nor informal request for information from either agency,” the statement said. “We take our public disclosure obligations very seriously. Herbalife does not intend to make any additional comments regarding this matter unless and until there are material developments.”
At the FBI, Christos Sinos, a supervisory special agent, did not deny that an inquiry was underway. Rather, he said simply, “We are not commenting.”
Source: L.A. Times
