Pivotal Research Analyst: Chance Of FTC Shutting Herbalife Down Is 'Next To Zero'

On Thursday, Timothy Ramey from Pivotal Research Group published a note to clients in which he argued that the FTC’s investigation of Herbalife Ltd. HLF could conclude this summer.

Ramey was on CNBC recently to explain why he thinks so.

Herbalife Feeling Good About Its Position

"I certainly don’t have any data points that would say, 'This is it,' but it’s clear that the company has done a lot of work in terms of delivering data and documents to the FTC," Ramey said.

"We have had 15 months go by, and just the body language of Herbalife itself, not the least of which launching that attack site earlier this week, says they are feeling pretty good about the position they are in."

Related Link: Analyst Says Chance Of Adverse Herbalife FTC Finding "Very Unlikely"

No Evidence Of Criminal Behavior

Ramey was asked if there's any chance of Herbalife being engaged in any sort of criminal activity. He replied, "We have done a ton of work on the company for sure, and we don’t see any evidence of criminal behavior anywhere really."

" Ramey continued, "I think it’s quite reasonable that they would be asking for information from distributors. That’s part of the process. So, we shouldn’t be surprised by that."

Not An Illegal Pyramid Scheme

On whether there are any chances of the FTC shutting Herbalife down, "No, I think the chance of that is next to zero. If it was an illegal pyramid scheme – and we know it’s not – we think that the FTC would have used injunctive relief to shut the company down rather than the CID process, as they have with other illegal pyramid schemes.

"So, it would be very naïve and perhaps even insulting to the FTC to suggest that Herbalife has operated for 35 years under their noses in a very big and demonstrable way and they just didn’t detect that it was an illegal pyramid scheme? Come on. I think that's far fetched, " Ramey concluded.