Skip to main content

Market Overview

Herbalife Down After National Consumers League Asks for FTC Investigation

Herbalife Down After National Consumers League Asks for FTC Investigation

Shares of Herbalife (NYSE: HLF) tumbled on Wednesday after the National Consumers League sent a letter to the Federal Trade Commission. The NCL asked the regulator to open an investigation into Herbalife.

In its letter, NCL specifically names Pershing Square and cites the hedge fund's “eighteen-month investigation.” The NCL states that it has met with Pershing Square, Herbalife and the Direct Selling Association, and believes that the FTC should digest Pershing's accusations on its own.

Pershing Square is currently short roughly one-fifth of Herbalife's outstanding shares. In a presentation given last December, Pershing Square's Bill Ackman accused Herbalife of running a pyramid scheme. According to Ackman, Herbalife's business violates U.S. law.

But other hedge fund managers have taken the other side of Ackman's trade, including Dan Loeb and, most notably, Carl Icahn. Activist investor Icahn currently owns more than 15% of Herbalife, and has been permitted by the company's management to acquire up to 25%.

Despite drawing firing from his peers, Ackman remains as resolute as ever in his beliefs on Herbalife. Following the release of NCL's letter, Pershing Square commented that it was “pleased that the NCL...has investigation of Herbalife.”

Meanwhile, Herbalife itself told the WSJ that “the NCL has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife” and that “Pershing Square...should be investigated by appropriate authorities.”

Shares of Herbalife slid nearly 2% on Wednesday.


Related Articles (HLF)

View Comments and Join the Discussion!

Posted-In: Bill Ackman Carl IcahnNews Hedge Funds Legal Intraday Update Movers General Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at