New York, NY, United States (4E) – Herbalife Ltd. denied claims by a newspaper report saying that the supplement-maker was being investigated by law enforcement authorities after multiple complaints filed against them with the Federal Trade Commission (FTC).
According to a New York Post report that appeared on Monday, the FTC may be looking into Herbalife’s operations. The article came after a request for information was filed with the newspaper under the Freedom of Information Law.
The Post cited documents obtained from the FTC to support the story, which also bolstered claims by hedge fund manager Bill Ackman of Herbalife’s practice to inflate pricing, mislead sales information and create complicated incentive structure to conceal a pyramid scheme.
Over the last few years, Herbalife had 192 complaints filed against them, according to the FTC. The agency also released 729 pages of complaints, although some information have been redacted. Among the issues raised against Herbalife included false promises made the company, difficulty for distributors to get refunds or collect income, among others.
The newspaper also reported that distributors told FTC officials that they suspected Herbalife was operating a pyramid scheme long before Ackman’s stated the same claims.
Herbalife has maintained its business is not a pyramid scheme but rather a retail-oriented business with products made from unique ingredients.
In a statement, Herbalife said that the New York Post report is wrong and demanded that the newspaper issue a correction.