Thursday, January 10, 2013

SEC Opens Investigation into Herbalife

Herbalife product brochure Cover RU Russian Fe...
Herbalife product brochure
Cover RU Russian Federation
(Photo credit:
The hedge fund manager's allegation that Herbalife is merely a pyramid scheme has now reached a new crescendo when SEC decided to open an investigation into the allegations, according to FOX business news.

While this is only starting, this adds pressure on Herbalife, which already faced verdict of "pyramid scheme" in Europe.

William Ackman, in December 2012, had made a case with 300+ panels presentation, that Herbalife is a pyramid scheme, not MLM. Herbalife responded by "we are contemplating legal action".

While there's no way to know which way is SEC going to rule, as it'll be months before any results come out, this will add pressure on Herbalife to either open its books and show things it may not want to show, or lead to further airing of dirty laundry and further taint the reputation of MLM.

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