Herbalife News Stories [Archive] - RealScam.com - Is it, or isn't it? You Decide.

scratchycat

02-08-2014, 11:23 AM

Some sad stories from 2004 and 2005 - did anyone get this information to the right people?? Or were they just too embarrassed to let others know how they got taken??

Herbalife Unsuccessful Stories - 2004/2005

page 1 | 2 | 3 | 4 | 5

For anyone that doesn't already know, the longest, and most important article on Cockeyed.com is the "Work at Home Overload" story about Herbalife and their business model. Because that story is so highly ranked, it finds its way in front of many web surfers seeking information about herbalife or working from home.
I get hate mail, thank you letters, and stories about real people and their attempt to build a small business with the Herbalife MLM model. These are the Unsuccessful Stories.

Rob,

Thanks so much for your website!! You must have heard this story a million times by now, but here's mine: I recently responded to a work from home ad in the online classifieds of my local paper. I went to their website, viewed their presentation. It was Global Online Systems. I thought their website was good, very persuasive and appealing. So I ordered the decision package. Had I known about your site, I would have know it was Herbalife.

Three years ago, I got suckered into Newest Way to Wealth. Got the $299 package - never made my money back (go figure!).

It has been a little over a week since the decision package arrived. Interestingly enough, they include an herbalife presentation on how to sponsor people on the CD rom. I thought maybe this time it could be different. I'm not very good at selling things (even though they tell you you don't have to be) and I hate putting pressure on people and dealing with objections, etc. I think the biggest point you made (for me anyway) is how saturated Herballife is online and offline. I'm so glad I found your website in time to save me from losing more money on this. I have a phone appointment with my "mentor" for the first time tomorrow morning. I'll be asking her for a refund.

Thanks again,

~Alicia

-3/20/04---

Hello
My name is Peggy and I am one of the nuts that signed for Newest Way to Wealth. $5,000 and I have not made one cent. My sponsor will not take my calls, Herbalife would not take the products back. They said for me to call my sponsor. I tried selling my products on e-bay and got a hot letter from Herbalife to cease. they were going to take legal action against me as I was no longer a distributor. Im 64 years old living on social security. The $5,000 was put on a credit card. God help me. How could anyone be this stupid. Is there anything I can do to get some of my money back?
Thank you
Peggy W.
Faber, Va.

3/26/04
Subject: Victim who worked very very hard in the Global Online System

Hi Rob

My name is Stanley and I have been in the Global Onine System (selling HERBALIFE products) for more than one year. I lost more than $7000 Canadian in total following all their rules and attending all thier trainings. All my downlines lost on average $3000Canadian(of course, some of them are not serious as I was). I met Debbie Stoltz, her husband Gerry, Martin Lyttek,
Shawn Dahl, Dwayne Norris and my coach Deborah Haskins personally. I don't know if I should call them "bad" people or not. But the reality was they "had to" lie to everyone interested in the system and get them to pay.

Joining and working in the Global Online System was a completely nightmare to me. It was the biggest regret in my life. Here are the BIGS LIES that you will hear in the Global Online Training.

Lie #1: Global Online System(GOS) is a business offering better opportunities for making large sums of money than all other traditional business and professional models. If you don't make money, it's because you complain too much and you are not serious.

Truth: For almost everyone who invests GOS turns out to be a losing financial proposition. I was losing money every single month in the business (from Mar 2002- Mar 2003) working 10 hours per day, but I had to lie on the stage that I was making large sum of money.

Lie #2: Eventually all products will be sold by Global Online System, a new form of marketing. Retail stores, shopping malls, catalogues and most forms of advertising will soon be rendered obsolete by MLM.

Truth: Most my downlines were forced to sell their Herbalife products through Ebay since their products simply didn't "move". Most GOS customers quit buying the goods as soon as they quit seeking the "business opportunity." There is no brand loyalty.

These basic facts show that, as a marketing model, GOS is not replacing existing forms of marketing. It does not legitimately compete with other marketing approaches at all. Rather, GOS represents a new investment scheme that uses the language of marketing and sales of products.

Lie #3: Global Online Sytem is a new way of life that offers happiness and fulfillment. It is a means to attain all the good things in life.

Truth: It was a miserable year for me and all my downlines. I told my coach Deborah that I was depressed since I had no more money in my bank. She told me not to tell my downlines about it and suggested that I should ask my parents to borrow money.

Lie #4: You can do Global Online System in your SPARE time. As a business, it offers the greatest flexibility and personal freedom of time. A few hours a week can earn a significant supplemental income and may grow to a very large income making other work unnecessary

Truth: THIS IS THE BIGGEST LIE!!! Working in GOS requires extraordinary time commitment as well as considerable personal wiliness, persistence and deception. Beyond the sheer hard work and special aptitude required, the business model inherently consumes more areas of ones life and greater segments of time. They say "work at the comfort of your home with your kids", but this is a BIG LIE! They encouraged me to go out there and do pull tabs and posters every night during winter!

Lie #5. Global Online System is a positive, supportive new business that affirms the human spirit and personal freedom.

Truth: GOS materials reveal that much of the message is fear-driven and based upon deception about income potential. Solicitations frequently include dire predictions about the impending collapse of other forms of distribution, the disintegration or insensitivity of corporate America and Canada, and the lack of opportunity in other professions or services. Conventional professions, trades and business are routinely demeaned and ridiculed for not offering 'unlimited income.' Employment is cast as wage enslavement for 'losers.' MLM is presented as the last best hope for many people. This approach, in addition to being deceptive, frequently has a discouraging effect on people who otherwise would pursue their own unique visions of success and happiness. A sound business opportunity does not have to base its worth on negative predictions and warnings.

Lie #6. Global Online System is the best option for owning your own business and attaining real economic independence.

Truth: GOS is NOT true self-employment. 'Owning' an MLM distributorship is an illusion. Participation requires rigid adherence to the 'duplication' model, not independence and individuality. GOS distributors are NOT entrepreneurs but joiners in a complex hierarchical system over which they have little control.

Bob, please help me spread this msg out. I am tired of seeing victims being blamed about not being serious enough.

-Stanley Cheng

Hi Rob,

I almost got sucked into this company. Believe it or not, their website is listed as a link under "Monster.com" for home based businesses (a job search website). Go figure! As you said, their website said nothing about the product or business, just success stories. Before I purchased that "decision kit" for $39.95, I decided to do some research on Global Online Systems and thank God I found you.

May God continue to use you to spare people like me from making a commitment that we will later regret. I was once a Herbalife distributor years ago, and you are right, only a few ever succeed. Thanks again.

Lois

4/29/04

Dear Rob,
I was sorry to read your web site too late before the damage was done.
Herbalife plus others left my family in ruins. We did not catch on until we were ten thousand dollars in credit card debt and now that I have lost my regular job with no hopes of finding another because I've become disabled we have no more money coming in. Let me be clear it was not all herbalife, we also tried Retire Quickly, and Pre-Paid Legal & MyEliven.com all these were fruitless endeavors and continued drain on our credit which two years ago was rated at 1A. Now we stand to lose everything including our home. We are in a bad place right now and it sickens me that companies like these can do this to people simply by leaving out the facts as you have shown them on your sites. There seems to be no re course unless you have money to fight back.these People pretend to be your friends, it's all a con that hurts people. I am sure that we are not the first. All I wanted to do is protect my family and give them security all I have done now is brought us ruin and heart ache.
sincerely,
Jim Felter

for more heartache, read on (http://www.cockeyed.com/workfromhome/epilogue/unsuccessful/unsuccessful2005.html)

Will they get any sympathy from Herbalife guru's??? Will anyone stand up and accept the blame for ruining these peoples' lives?? They make answer to a greater authority one day. But for now, how about some cyber crime cops paying attention??

JustTooMuchTime

02-09-2014, 12:43 AM

According To MSN Money

"Others to be profiled in the future include:

Leslie Stanford, a 33-year Herbalife veteran, member of the Founder’s Circle, and former member of the Board of Directors.
John Tartol, a 32-year Herbalife veteran, a member of the Chairman’s Club, and current member of the Board of Directors.
Other senior distributors are expected to be added over time."

Hedge-fund chief ratchets up the war against Herbalife- MSN Money (http://money.msn.com/top-stocks/post--hedge-fund-chief-ratchets-up-the-war-against-herbalife)

ribshaw

02-10-2014, 12:13 PM

[COLOR="#800080"][SIZE=4]S
Hello
My name is Peggy and I am one of the nuts that signed for Newest Way to Wealth. $5,000 and I have not made one cent. My sponsor will not take my calls, Herbalife would not take the products back. They said for me to call my sponsor. I tried selling my products on e-bay and got a hot letter from Herbalife to cease. they were going to take legal action against me as I was no longer a distributor.

Being sued for selling product a distributor purchased sounds an awful lot like what happens to employees rather than to business owners. And this is certainly not the first MLM that has tried the strong arm tactic to bully those who just want to get some money back. The word "cartel" comes to mind.

I digress, I love to see what stuff sells for on Ebay and the like. If you google the 21-Day Wallet Cleanse other than the companies official site, all the listings are for Ebay. Shock of all shockers. Herbalife in general has over 5000 listings at the time I searched.

Currently 38 listings on Ebay and 15 on Amazon for this scamlament alone. People can take and try to sell whatever they want, I have yet to see any convincing evidence that cleansing works. Other than what your body already does if you follow a decent diet.
7006

==================================================

Stuff like this has always been my favorite about MLM. Top 38 Complaints and Reviews about Herbalife (http://www.consumeraffairs.com/nutrition/herbalife.html)

I saw an ad on Craigslist to teach group class Kickboxing and Yoga and Zumba. Being a Thai kick boxer and wanting to teach a group class, I responded to the email. After a few days, I get a call for an interview. I go to the interview and they have me teach a boot camp class at a park and told me to come back the next day for the second part of the interview. So the next interview comes around and they are telling me about Herbalife and how they want me to sell it for them. I told them, "No, thank you." And asked about the group class opening for the teaching kickboxing interview and the lady told me that they are not looking to do any group class. The class I taught the day before was her and a few of her staff.

NikSam

02-10-2014, 12:36 PM

Heh, a month ago, a taxi-driver tried to recruit me to TelexFree.
I told him it is a pyramid and already facing whole a lot of legal issues in Brazil, Peru and Portugal.

He started standard pitch like "Everything we see around is a pyramid, banks, pension, insurance ...", i asked him to stop , but would have loved to continue the argument , just did not want to be kicked out of the car :)

scratchycat

02-11-2014, 01:46 PM

I saw an ad on Craigslist to teach group class Kickboxing and Yoga and Zumba. Being a Thai kick boxer and wanting to teach a group class, I responded to the email. After a few days, I get a call for an interview. I go to the interview and they have me teach a boot camp class at a park and told me to come back the next day for the second part of the interview. So the next interview comes around and they are telling me about Herbalife and how they want me to sell it for them. I told them, "No, thank you." And asked about the group class opening for the teaching kickboxing interview and the lady told me that they are not looking to do any group class. The class I taught the day before was her and a few of her staff.

Thanks and that shows a bit of what extremes they go to try and convince people to buy and sell their products. All they have to do is get YOU to buy, they don't give a rat's behind if you sell it or not but they want you and others to keep buying...

JustTooMuchTime

02-13-2014, 12:14 AM

"Stanford runs the online recruiting business Success Connection, which sells training videos, recruiting scripts and other business tools to Herbalife distributors. Her recruitment materials make blatantly false claims about making money through Herbalife, telling recruits they can have “big money,” “fancy cars,” “nice homes,” and “travel to exotic locations.”

From:

Herbalife Ltd. (HLF): Pershing Square Profiles Leslie Stanford (http://www.valuewalk.com/2014/02/herbalife-ltd-hlf-leslie-stanford/)

Leslie Stanford expose:

Leslie Stanford | Herbalife Pyramid Scheme (http://www.herbalifepyramidscheme.com/perpetrators/leslie-stanford/)

littleroundman

02-13-2014, 05:47 AM

The New York Post.com (http://nypost.com/2014/02/12/no-protective-order-for-herbalife/)is reporting:

No protective order for Herbalife

Herbalife is not entitled to a protective order that called out Bill Ackman, his Pershing Square Capital Management hedge fund and his lawyers, a California judge has ruled.

The proposed order was drafted by Herbalife and Dana Bostick, the former California distributor who is suing the company under the state’s “chain letter,” or pyramid scheme, law.

It’s common for parties to come up with protective orders that forbids sharing of confidential information obtained during discovery — but the judge balked when Herbalife went a step further and suggested a “highly confidential, lawyers’ eyes only” category for “high-risk” experts that have had anything to do with Pershing Square since 2010 or might in the next three years.

It defined a “Pershing Square person” as “any present or former directors, officers, executives, partners, principals, trustees, employees, agents, attorneys, accountants, advisors and representatives, or any other person(s) known, believed or suspected to be acting or purporting to act on its behalf, now or at any previous time since January 1, 2010, including but not limited to William Ackman and Sullivan & Cromwell LLP.”

NYPost.com (http://nypost.com/2014/02/12/no-protective-order-for-herbalife/)

JustTooMuchTime

02-14-2014, 01:35 AM

"Ackman also said yesterday he believes Herbalife’s recent decision to sell $1 billion of convertible bonds came after it couldn’t get a traditional bank loan.

“They couldn’t sell a bond to a conventional institutional investor,” he said. “I don’t think they could get a bank to loan them money.”

Ackman Says Herbalife Bet Carries Bigger Potential Gain - Businessweek (http://www.businessweek.com/news/2014-02-13/ackman-says-bet-on-herbalife-now-carries-bigger-potential-gain)

NikSam

02-14-2014, 01:54 AM

Herbalife backers still think chances of FTC smashing their crap is NIL

Herbalife Ltd. (HLF) news: Ackman Will Lose: Regulatory Action Is A Low-Probability Event - Seeking Alpha (http://seekingalpha.com/article/2019811-ackman-will-lose-regulatory-action-is-a-low-probability-event)

JustTooMuchTime

02-14-2014, 11:36 PM

"Icahn kept his Herbalife holding steady, but Soros has now trimmed its stake to 3.2 million shares from 5 million shares."

" The family foundation of Soros' former lieutenant, Stanley Druckenmiller, no longer listed Herbalife on its filing, after having had held 79,032 shares at the end of the third quarter.

Hayman's Bass, another closely followed manager, liquidated his firm's stake by selling 436,371 shares.

Other firms have take some money off the table. Tiger Consumer Management cut its position by 48 percent to 400,000 shares, while Adage Capital Partners cut its stake by 40 percent to 441,276 shares."

SOROS EXITS JCPENNEY, TRIMS HERBALIFE, OTHERS FOLLOW (http://www.oregonherald.com/news/show-story.cfm?id=414458)

NikSam

02-14-2014, 11:55 PM

Those rich scammers (and DSA lobbyists) smell something is burning

Whip

02-15-2014, 12:48 AM

amazing who gets sucked into the crap. clem said anything about this yet since he's an alleged 'court expert'?

HomeFlooring

02-15-2014, 05:40 AM

Awesome scratchy cat...:shocked:

scratchycat

02-15-2014, 12:08 PM

Did someone call me when I was not looking?? Looks like HomeFlooring must have been floored right away! Thanks admin for whatever happened. Glad I am awesome though. :RpS_smile:

JustTooMuchTime

02-17-2014, 03:07 PM

"...PricewaterhouseCoopers said they didn’t find anything fishy in the company’s finances, but what regulators may be most concerned about is where the income comes from."

"LULAC also noted that Herbalife Ltd. (NYSE:HLF) itself admitted that 73% of its distributors don’t want to sell; they’re just consumers. The organization said they “find that fraudulent.”

"if Canada really is investigating, then what will it take for the U.S. to follow?"

"...China’s investigation into competitor Nu Skin Enterprises, Inc. (NYSE:NUS). The nation hasn’t begun to target Herbalife Ltd (NYSE:HLF) yet, but how many times can the company dodge a bullet?"

"One former distributor told ValueWalk last week that Herbalife told him it would pay for him to recruit other distributors but that he never received a dime for any of the approximately 15 people he recruited."

From:

Herbalife Ltd. (HLF): How Many Lives Does It Have? (http://www.valuewalk.com/2014/02/herbalife-ltd-hlf-many-lives/)

JustTooMuchTime

02-18-2014, 03:58 PM

"China’s State Administration for Industry & Commerce is drafting rules that would regulate sales-force training, monitor marketing meetings and tighten application procedures when direct sellers seek to enter new regions in China and offer new products, said the people, who asked not to be identified as the matter isn’t public.

Tighter restrictions stand to affect the China operations of direct-selling companies including Amway Corp., Herbalife Ltd. (HLF) and Mary Kay Inc. The probe into Nu Skin led the company to promise a review of operations in China, where it got more than half its revenue in the three months ended in September, and postpone its full earnings release."

China Said to Plan Tighter Direct-Sales Rules Amid Nu Skin - Bloomberg (http://www.bloomberg.com/news/2014-02-18/china-said-to-plan-tighter-direct-sales-rules-amid-nu-skin-probe.html)

scratchycat

02-19-2014, 11:00 AM

I wondered when Herbalife was going to be connected with NuSkin as basically they seem to be the same kind of MLM/pyramid schemes. I would be out of my element to comment on Mary Kay and Amway as to me they are in same category along with Avon but that is in my humble opinion only.

JustTooMuchTime

02-19-2014, 11:43 PM

"By Svea Herbst-Bayliss

(Reuters) - Nutrition and weight loss products company Herbalife Ltd (HLF.N) lowered its forecast range for 2014 sales and again defended itself on Wednesday against allegations by billionaire investor William Ackman that its business is a fraud.

Herbalife, embroiled in a dispute with Ackman who over the past 14 months has accused the company of being a pyramid scheme, discussed earnings projections and its response to a U.S. lawmaker's inquiry into its business with analysts on a quarterly call.

Sales are expected to grow between 7.5 percent and 9.5 percent this year, in part because of strong business in China. Those numbers are lower than the company had forecast in October, when it reported third quarter results, and said 2014 sales would grow between 9 percent and 11 percent.

Investors said that may have added to pressure on Herbalife's stock price, which closed down nearly 4 percent on Wednesday at $66.18 per share.

Overall the outlook remained robust, however, with the company raising its earnings forecasts for the year to $5.85 to $6.05 a share, from $5.45 to $5.65.

On the call, Herbalife chief executive Michael Johnson described Ackman's short bet against Herbalife as "a reckless bet placed by a Wall Street gambler." Ackman first accused Herbalife publicly of running a pyramid scheme in December 2012. A pyramid scheme is an unsustainable business that typically makes most of its money by recruiting distributors rather than selling products to real customers.

The company says it operates a legitimate multi level marketing business and Johnson struck back both at Ackman on the call and in a letter to Senator Edward Markey, a Massachusetts Democrat with an interest in consumer protection. Markey started asking questions about the business in January.

Ackman has lost hundreds of millions on his $1.16 billion bet against Herbalife as the company's stock price has climbed 67 percent in the last 12 months.

Executives on the call told analysts that the company was obeying all regulations in its business in China, and met with Markey's staff late last month.

In the letter to Markey, dated February 18, Johnson said the company's compensation is driven by product sales, not recruitment. A copy of the letter was seen by Reuters.

Johnson also wrote that he wants to "assure (Markey) in the strongest possible terms, as we assured your staff, that Herbalife does not 'target' members of minority or low income-communities."

Civil rights groups have said the company preys on minorities with seductive advertising and promises to get rich by selling Herbalife products.

Executives told analysts on the call that Herbalife was poised to gain from a global obesity epidemic by offering products designed for weight loss. They said the bulk of customers buy the product for their own use and only a small number try to make a business out of selling products to others.

In the letter, Johnson said Herbalife wants its members to live a "healthier lifestyle" and give them a choice to "take advantage of the business opportunity that a multilevel marketing business model, like Amway, Avon or Tupperware, can offer."

When Markey made his questions public, the company's stock price dropped 15 percent. Markey set a deadline of February 28 for the company to respond to his questions.

News last month that Chinese officials were probing allegations that NuSkin (NUS.N) another multi-level-marketing firm, has been exaggerating its influence and creditworthiness in brochures, had weighed on Herbalife shares earlier this year."

Source:
Herbalife lowers forecast range for 2014 sales | Reuters (http://www.reuters.com/article/2014/02/19/us-herbalife-forecast-idUSBREA1I2AF20140219)

JustTooMuchTime

02-19-2014, 11:57 PM

The Scribd embed code didn't work, so here's a link to the letter:

Hlf Letter (1) (http://www.scribd.com/doc/208027417/Hlf-Letter-1)

From this story:

"Herbalife Sends Letter To Markey With Some Questionable Claims
- by Jacob Wolinsky

Herbalife Ltd. (NYSE:HLF) sent a letter to Senator Markey, a copy of which has been obtained by ValueWalk. The company claims that it does not target low income populations or minorities; however, this appears to directly contradict some other public statements by the MLM. Below are some comments from the letter contrasted with excerpts from earlier HLF comments. At the bottom is the full letter from Herbalife."

Full story with rebuttals to the HLF claim about not targeting low income populations or minorities:

Herbalife Sends Letter To Markey With Some Questionable Claims (http://www.valuewalk.com/2014/02/herbalife-sends-letter-markey-questionable-claims/)

JustTooMuchTime

02-21-2014, 09:45 AM

"Herbalife executives head to DC to explain business model

(Reuters) - Herbalife executives will meet with U.S. lawmakers' staffs in Washington on Friday to explain the business model of the nutrition company that has been fending off accusations by billionaire investor William Ackman that it is running a pyramid scheme.

Herbalife Chief Financial Officer John DeSimone and other company representatives will host a session where Congressional staff members can ask questions about how the company's direct selling business works, according to an invitation sent by the lobbying firm Raben Group and seen by Reuters.

An Herbalife spokesman confirmed the planned meeting and said: "We look forward to educating Congressional staffers about the important economic impact of the direct selling industry and our company, and answering their questions."

The meeting suggests that Herbalife is stepping up its lobbying efforts in Washington at the same time as Ackman is stepping up his campaign against the company.

For more than a year, Ackman has been betting that Herbalife's share price will collapse amid regulatory scrutiny, but so far his $1.16 billion short position has left him with paper losses as the stock price has climbed.

Ackman's rivals, including Carl Icahn, have lined up against his short bet by taking stakes in Herbalife.

Last month Senator Edward Markey, a Massachusetts Democrat, waded into the battle by requesting details from Herbalife about its business model, how members earn compensation, and whether it targets minorities as civil rights groups have alleged.

Boston City Councilor Tito Jackson and Massachusetts state Senator Sal DiDomenico have also called for an investigation into the company, as have lawmakers from California, New Mexico, Nevada and New York.

U.S. regulators have declined comment on whether they are conducting investigations into Herbalife. Herbalife has repeatedly denied running a pyramid scheme, a model in which participants are paid solely to recruit more members into the scheme.

On its quarterly earnings call this week, Herbalife said it has answered all of Markey's questions. The company sent a letter dated February 18 in which it denied accusations it is running a pyramid scheme.

Markey's spokeswoman, Giselle Barry, said he is reviewing the answers and waiting for responses from the Securities and Exchange Commission and the Federal Trade Commission, whom he asked to probe the company.

Herbalife's Johnson has said that the bulk of Herbalife distributors join up to get discounts on products they use themselves and that only 4 percent of them want to turn selling Herbalife products into a full-time job.

Ackman has countered that claim, saying the company's videos suggest that anyone can get rich quickly by selling Herbalife products and they prompt many to spend thousands of dollars trying to build a business that often fails.

Ackman told his investors at a dinner last week that his $12 billion Pershing Square Capital Management began putting on its short position against Herbalife on May 1, 2012 and that the stock has appreciated by 23 percent since then, according to a presentation seen by Reuters.

(Reporting by Svea Herbst-Bayliss; Editing by Richard Valdmanis and David Gregorio)"

From:
Herbalife executives head to DC to explain business model | Reuters (http://www.reuters.com/article/2014/02/20/us-herbalife-idUSBREA1J27T20140220)

NikSam

02-21-2014, 10:05 AM

Yeah, they should sell all congressmen Herbalife membership kits and sign them up, that will be perfect demonstration how it works :)

ribshaw

02-26-2014, 10:50 AM

Bold and underlining mine.

Activist hedge fund manager Bill Ackman continued his relentless attack on Herbalife, releasing a report that accuses millionaire Herbalife distributor John Tartol of misleading others into selling the company's nutrition products.

Ackman's company, Pershing Square Capital Management, said in the report released on its website Thursday that Tartol has made millions of dollars by misleading people into believing they can get rich as independent Herbalife distributors.

“What took us that many years to do — 25, 30-plus years — you can all do in the next six, seven, eight years,” Tartol said at a 2011 Herbalife convention in Las Vegas, according to Ackman's report. “This is why everybody here is fired up. Because we know it.”

Tartol, a member of Herbalife’s board since 2005, said Ackman's allegations are unfounded.

“As an Herbalife independent distributor for nearly 33 years, I am very proud of the success I've achieved and helped many, many others achieve,” he said in a statement released by Herbalife.

“Together we offer healthy nutrition and an opportunity to earn supplemental income. And yes, for the small percentage of Herbalife distributors who choose to work hard and build a business, there is an opportunity for significant financial success,” he said.

Tartol, a Malibu resident, is the highest-profile Herbalife distributor to be attacked by Ackman.

The vast majority of people who join Herbalife's network of distributors end up losing money, while fewer than 1% make a six-figure income, the Pershing Square report said.

The Los Angeles company sells nutrition and health products through independent salespeople in more than 80 countries. Its products are not available in stores.

In December 2012, Ackman accused Herbalife of operating a pyramid scheme and announced he had bet more than $1 billion on Wall Street that the value of the company's stock would fall.

The stock nose-dived on the news, but recovered last year, gaining more than 100% when regulators failed to act. Ackman trimmed his short position, a Wall Street play that pays when a stock’s price falls.

Nevertheless, Ackman has increased his pressure on the company in recent weeks, releasing detailed attacks on successful Herbalife distributors.

Herbalife has defended its business model, saying the vast majority of people who sign up as distributors do so to get discounts on nutrition products they personally consume, not to get rich.

Company spokeswoman Barb Henderson said Ackman's latest attack is meritless.

“Having failed last year to make a return on his reckless $1-billion bet by attacking our business model, Ackman is now launching desperate attacks on individuals,” she said.

Herbalife shares rose 76 cents Thursday, or 1%, to $66.94.

Ackman accuses Herbalife director of misleading recruits - latimes.com (http://www.latimes.com/business/money/la-fi-mo-ackman-accuses-herbalife-director-of-misleading-advertising-20140220,0,3670897.story#ixzz2uRZWqpXA)

JustTooMuchTime

02-27-2014, 01:01 AM

"Herbalife recently donated money to five of the seven Hispanic groups that signed a letter last week supporting the company, The Post has learned.

The donations were not disclosed and were only admitted by Herbalife after a reporter contacted three of the groups on Wednesday."

Herbalife donated money to 5 supportive Hispanic groups | New York Post (http://nypost.com/2014/02/26/herbalife-donated-money-to-5-supportive-hispanic-groups/)

NikSam

02-27-2014, 06:04 AM

Herbalife donated money to 5 supportive Hispanic groups | New York Post (http://nypost.com/2014/02/26/herbalife-donated-money-to-5-supportive-hispanic-groups/)

That is a clean bribery to shut "minority" mouth (as alleged being specifically targeted by the scheme), donated to only those who agreed to support Herbalife

ribshaw

02-27-2014, 08:30 AM

Herbalife donated money to 5 supportive Hispanic groups | New York Post (http://nypost.com/2014/02/26/herbalife-donated-money-to-5-supportive-hispanic-groups/)

There is a LONG history of people running scams who were very generous in the community, figure it is plenty easy when you are spending other people's money. Not that this is what the donation is all about, am sure it is well intended.

JustTooMuchTime

02-28-2014, 01:43 PM

"Investor Ackman to detail Herbalife's China business on call
- By Svea Herbst-Bayliss

Feb 28 (Reuters) - Billionaire investor William Ackman, who has long claimed Herbalife Ltd is a fraud, on Friday said he would provide proof next month that the nutrition and weight-loss company is running a pyramid scheme in China.

Ackman launched his latest broadside against Herbalife on Friday morning in a short press release that promises details about his investigation into the company's business in China. He will hold a conference call on March 11.

"The report will show that Herbalife's business in China operates much like the company's business in the rest of the world - as a pyramid scheme," the release said.

Herbalife has steadfastly denied running a pyramid scheme, where participants earn more in recruiting new members into the operation than from selling the company's products outside of the network.

Herbalife did not immediately respond to requests for comment on Friday morning.

For more than a year, Ackman's $12 billion Pershing Square Capital Management hedge fund has bet just over $1 billion that Herbalife's share price would eventually fall to zero amid regulatory scrutiny. So far no regulator has acted, and the bet has lost money, ranking as the biggest loser in the fund's 10-year history.

Shares of Herbalife were down 0.1 percent at $66.93 in morning trading in New York.

But Ackman has said he remains optimistic. He and his staff have met with U.S lawmakers and regulators to push their case, and civil rights groups have joined in the battle against the company by claiming that its promises that people can earn money fast by becoming a distributor are untrue.

Ackman has highlighted some of Herbalife's top distributors on a website in the last several weeks.

Friday was also the deadline set by U.S. Senator Edward Markey for the Securities and Exchange Commission and the Federal Trade Commission to respond to his request that the two regulators probe the company."

Original:
Investor Ackman to detail Herbalife's China business on call | Reuters (http://www.reuters.com/article/2014/02/28/herbalife-ackman-idUSL1N0LX1B620140228)

JustTooMuchTime

02-28-2014, 04:52 PM

"BOSTON, Feb 28 (Reuters) - The U.S. Federal Trade Commission on Friday refused to say whether it is taking any action on allegations made against Herbalife but said it is considering a U.S. lawmaker's concerns about the company."

U.S. FTC says considering lawmaker's concerns about Herbalife: Thomson Reuters Business News - MSN Money (http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140228&id=17396004)

JustTooMuchTime

02-28-2014, 05:11 PM

From: http://www.markey.senate.gov/imo/media/doc/2014-02-27_FTC_re_Herbalife_Markey.pdf

"The Honorable Edward J. Markey
United States Senate
Washington, DC 20510

Dear Senator Markey:

Thank you for your January 23, 2014 letter regarding your concerns about Herbalife,
Ltd.'s business practices. I appreciate your thoughts about this matter and your commitment to
protecting consumers.

As you know, the Commission has been directed by Congress to protect consumers from
deceptive or unfair acts or practices, pursuant to the Federal Trade Commission Act (FTC Act),
15 U.S.C. §§ 41-58. In interpreting Section 5 of the FTC Act, 15 U.S.C. § 45, the Commission
has determined that a representation, omission, or practice is deceptive if (1) it is likely to
mislead consumers acting reasonably under the circumstances; and (2) it is material; that is,
likely to affect consumers' conduct or decisions with respect to the product at issue.

The Commission works actively to curb deceptive health claims and, in the last decade
alone, it has brought 77 law enforcement actions challenging deceptive weight loss advertising.
As you noted in your letter, the Commission just announced its most recent initiative in this area,
Operation Failed Resolution, in January 2014.1 In addition to the law enforcement actions,
Operation Failed Resolution included the release of Gut Check, an updated business guidance
publication on screening ads for false weight loss claims directed at publishers and other media
outlets.2 It also included "FatFoe," an educational teaser website to help consumers identify and
avoid such claims.3

The Commission also takes seriously the harm illegal pyramid schemes have on
consumers and has used its authority under Section 5 of the FTC Act in appropriate cases. For

1 A press release detailing the initiative, which included four law enforcement actions, can be found on the
Commission website at Press Releases | Federal Trade Commission (http://www.ftc.gov/news-events/press-releases/2014/01/sensa-three-other-marketers-fad-)
weight-loss-products-settle-ftc.
2 This publication is available on the Commission website at http://www.business.ftc.gov/documents/gut-check-
reference-guide-media-spotting-false-weight-loss-claims.
3 Another consumer education publication, Weighing the Claims in Diet Ads, along with other weight loss and
fitness related materials, is available on the Commission website at https://www.consumer.ftc.gov/articles/0061 -
weighing-claims-diet-ads.

example, since 1996, the FTC has brought 15 cases alleging that purportedly legitimate multi-
level marketing companies were in fact pyramid schemes in masquerade. Most recently, last
year the FTC filed a case against Fortune Hi-Tech Marketing, Inc. and related entities.4 The
FTC alleged, among other things, that the defendants operated an illegal pyramid scheme and
falsely claimed consumers would earn significant income for selling various products and
services. In reality, the FTC charged that nearly all consumers who signed up with the scheme
lost more money than they ever made. The FTC further alleged that to the extent consumers
could make any income, it was mainly for recruiting other consumers. This case is in litigation.

In addition, the FTC also recently won a victory in a similar case against BurnLounge,
Inc. and several of its top promoters.5 The FTC sued these defendants for operating a pyramid
scheme, making deceptive earnings claims, and failing to disclose that most consumers who
participated would not receive substantial income, but instead would lose money. More than
56,000 consumers fell victim to this operation. In March 2012, a court in the Central District of
California entered a final judgment and order against BurnLounge, Inc. and several of the other
defendants. The final order requires the defendants to pay close to $ 17 million for consumer
redress. It also prohibits them from engaging in pyramid, Ponzi, or chain letter schemes or any
schemes in which compensation for recruitment is unrelated to the sale of products to customers
who are not participants. Additionally, the order bars misrepresentations about multi-level
marketing operations or business ventures. The case is currently on appeal to the United States
Court of Appeals for the Ninth Circuit.

With respect to the allegations against Herbalife, Ltd., a number of statutory provisions
and the Commission Rules of Practice prevent me from discussing what action, if any, the
Commission may take in any particular situation. I can assure you, however, that the
information you provided and the concerns you expressed are being carefully considered. In
general, in determining whether to take enforcement or other action, the Commission may
consider a number of factors, including the nature of the practices at issue; the type of violation
alleged; the likelihood of preventing future unlawful conduct and securing redress or other relief;
the nature and amount of consumer injury at issue; and the number of consumers affected.

Complaints from consumers can provide valuable information that we frequently use to
identify deceptive and unfair practices in the marketplace. Therefore, please encourage your
constituents to file their complaints with the FTC, in English or in Spanish, by visiting the FTC's
online Complaint Assistant at https://www.ftc.gov/complaint or by calling 1-877- FTC-HELP
(1-877-382-4357).

4 See FTC v. Fortune Hi-Tech Marketing, Inc. et al., 13-CV-578 (N.D. 111. Jan. 24, 2013); Press Release, FTC
Action Leads Court to Halt Alleged Pyramid Scheme (Jan. 28, 2013), available at http://www.ftc.gov/news-
events/press-releases/2013/01 /ftc-action-leads-court-halt-alleged-pyramid-scheme.
5 See FTC v. BurnLounge, Inc. et al., No. 2:07-CV-03654 (C.D. Cal. June 6, 2007); Press Release, FTC Action
Leads to Court Order Shutting Down Pyramid Scam (Mar. 14, 2012), available at http://www.ftc.gov/news-
events/press-releases/2012/03/ftc-action-leads-couit-order-shutting-down-pvramid-scamthousands.

The Honorable Edward J. Markey

Thank you again for your letter. If you or your staff has additional questions or
comments, please feel free to contact me or have your staff contact Jeanne Bumpus, the Director
of our Office of Congressional Relations, at (202) 326-2946.

Sincerely,

Edith Ramirez
Chairwoman"

JustTooMuchTime

03-02-2014, 08:54 PM

"He will hold a conference call on March 11.

"The report will show that Herbalife's business in China operates much like the company's business in the rest of the world - as a pyramid scheme," the release said."

"He and his staff have met with US lawmakers and regulators to push their case, and civil rights groups have joined in the battle against the company by claiming that its promises that people can earn money fast by becoming a distributor are untrue."

Source:
Investor Ackman says will prove Herbalife?s China business is a fraud - BUSINESS - Globaltimes.cn (http://www.globaltimes.cn/content/845709.shtml#.UxPc-4UXdjA)

scratchycat

03-03-2014, 10:58 AM

Thanks for keeping this updated and for the information.
by claiming that its promises that people can earn money fast by becoming a distributor are untrue." Is a very true statement.

JustTooMuchTime

03-04-2014, 10:51 PM

Nice undcover piece by Jessica Smith Cross in MetroNews.ca:

Here's the part where she comes clean about being undercover while meeting
with somebody who was trying to recruit her:

"Coming clean

During my investigation into Herbalife, Rojas didn’t know I was a reporter. When I told him, and showed him the research I’d done on the company, he said people fail because they don’t care or work hard enough.

When he thought I was going to spend $4,000 on Herbalife products to reach the supervisor level, Rojas had promised to make Herbalife work for me — to put all his time into making sure I sold the products I bought and helping me start a Herbalife downline organization of my own. To his credit, he never forced or bullied me to sign up or to spend excessive money up front, he only made a compelling and convincing pitch that it was a good idea that would help me get rich.

When I showed him the numbers on how rarely that happens in Herbalife, he said he wasn’t really aware of them and made an argument that numbers can convince anyone of anything in the world, but don’t necessarily represent the truth.

Rojas acknowledged his own success hasn’t been as great as he hoped, only as great as he’s worked. However, he also said he works incredibly hard and is devoted to the company, something I’d witnessed first hand."

Full undcover report here:
Herbalife investigation: Health products company or pyramid scheme? | Metro (http://metronews.ca/news/toronto/959613/herbalife-investigation-health-products-company-or-pyramid-scheme/)

littleroundman

03-04-2014, 11:01 PM

from the same article:

Only about one per cent of the 13,786 Canadian Herbalife distributors made more than $10,000 all year from their “downline” sales organizations and a tiny fraction of those who did—nine people—earned in the hundreds of thousands or millions of dollars.

Eighty-eight per cent of the distributors collected no payments from Herbalife.

However, Herbalife said it has surveyed its membership and says about 70 per cent of distributors join to get a product discount for personal use and never try to make money.

Even among those who have worked to build a business, few are successful. About 17 per cent of the company’s total 13,786 Canadian distributors were “sales leaders with a downline” which means they, or someone in their downline, bought a significant amount of product from Herbalife, and they have recruited others.

However, three out of four people considered “sales leaders” made less than $1,000 in compensation in 2012 Herbalife and only 6.8 per cent made more than $10,000 this way.

Canadian sales make up only one per cent of Herbalife’s global business. The company has a massive market in the U.S., but the rate of success there is nearly identical to Canada’s.

JustTooMuchTime

03-05-2014, 04:09 PM

I put this in the wrong section before, so I'm reposting it so that all the HLF news stories are in one place.

Herbalife Ltd. (HLF) SEC Responds To Sen Markey

"The Honorable Edward J. Markey
United States Senate
218 Russell Building
Washington, DC 20510-2107

Dear Senator Markey:

Thank you for your January 23, 2014 letter requesting that the Securities and Exchange
Commission (the "Commission" or "SEC") investigate the business practices of Herbalife, Ltd. to
determine whether it is acting in accordance with the federal securities laws. In particular, you
raised concerns over reports that Herbalife may be a pyramid scheme.

The Commission's investigations are confidential, and the Commission generally neither
confirms nor denies the existence of an inquiry or investigation unless and until made a matter of
public record in proceedings instituted before the Commission or in court. We do this to protect the
integrity and effectiveness of our investigative process and to preserve the privacy of the individuals
and entities involved. Accordingly, we cannot comment on whether SEC staff has investigated, or
is currently investigating, matters related to Herbalife. Nonetheless, we appreciate your letter and
the concerns you raised. I can assure you that we are giving your concerns every consideration.

In your letter, you asked for information in response to several questions. While specific
responses are provided below, it is important at the outset to note some general information
regarding the Commission's authority to enforce the federal securities laws as they relate to illegal
pyramid schemes and legitimate multi-level marketing ("MLM") companies.

The Commission's Division of Enforcement is responsible for investigating possible
violations of the federal securities laws, including unregistered offers and sales of securities and
false and misleading statements in connection with the offer, purchase, and sale of securities. The
antifraud provisions of the federal securities laws prohibit fraud, in the offer or sale, or in connection
with the purchase or sale, of securities. "Securities" include, among other things, a company's stock
and investment contracts offered by a company or promoters. Generally, the Commission's
jurisdiction is limited to investigating and prosecuting misconduct involving securities as defined by
the law and interpreted by the courts.

The Division of Enforcement regularly investigates the accuracy of disclosures by
companies that offer or sell securities. In these cases, Enforcement staff reviews corporate
statements, whether found in SEC filings, in statements by corporate officers, or elsewhere, to
investigate whether such statements are materially false or misleading. For example, the Division
may investigate whether a company or others misrepresented the company's business as having
attributes of a legitimate MLM company when, in fact, the company does not have those attributes.
The Honorable Edward J. Markey
Page 2

The Division of Enforcement also regularly investigates whether promoters offer or sell
securities, and, if so, whether the offerings of securities are registered with the Commission in
accordance with federal securities laws and regulations. In these offering cases, SEC staff reviews
the representations made by the promoters to determine whether the interest offered is a security.
For example, the Division may investigate whether promoters offered and/or sold to investors
securities in the form of investment contracts. Under certain circumstances, an interest in a pyramid
scheme may be an investment contract, and, therefore, a security subject to the Commission's
jurisdiction. Whether an interest is an investment contract depends on the particular facts and
circumstances as applied to the law. The Supreme Court has defined an "investment contract" to
include the investment of money in a common enterprise, with the expectation of profits derived
solely from the efforts of others. SEC. v. W.J. Howey Co., 328 U.S. 293,298-299 (1946).

In the securities law context, a so-called "pyramid scheme" is not a defined term, but rather
generally refers to a type of scam in which fraudsters may pitch as legitimate a business opportunity
in the form of MLM programs. SEC staff has issued an investor alert to warn the public of these
scams, titled Beware of Pyramid Schemes Posing as Multi-Level Marketing Programs, available at
www.sec.gov/investor/alerts/ia pyramid.htm. In this alert, the staff warns that pyramid schemes
masquerading as MLM programs may violate the federal securities laws, such as laws prohibiting
fraud and requiring the registration of securities offerings and broker-dealers. The alert explains
that, in a typical pyramid scheme, money from new participants is used to pay recruiting
commissions to earlier participants —just as in classic Ponzi schemes, where money from new
investors is used to pay fake "profits" to earlier investors. Recently, the Commission has sued
alleged operators of large-scale pyramid schemes for violating the federal securities laws by falsely
representing these scams to be legitimate MLM programs. For example, in SEC v. CKB 168, 13
Civ. 5584 (E.D.N.Y. 2013), Lit Rel. No. 22846 (Oct. 17, 2013),1 the Commission filed charges to
stop an alleged pyramid scheme. In addition, in an adjudicated settled action, SEC v. Rex Venture
Group, 12 Civ. 519 (W.D.N.C. 2012), Lit Rel. No. 22456 (Aug. 22,2012),2 the Commission shut
down a $600 million fraud that duped approximately one million Internet customers through a
complex investment scam involving a Ponzi scheme promoted as a daily profit-share pool and a
pyramid scheme pitched as a legitimate MLM company.

In addition to the SEC's efforts, other federal agencies also seek to combat illegal pyramid
schemes. See, e.g., Multilevel Marketing | Consumer Information (describing the
FTC's use of federal consumer protection laws to combat pyramid schemes) and
http://www.fbi.gov/scams-safetv/fraud (listing pyramid schemes as a common scheme that the FBI
investigates).

With this general information in mind, below are responses to your specific questions.

1) There is a great deal of opacity surrounding Herbalife's system of compensation.
a) Typically, how many compensation system levels do multi-level marketing
companies have? Is it common to see a multi-level marketing company have

1 See http://www.sec.gov/litigation/Iitrel...13/lr22846.htm.
2 See https://www.sec.gov/litigation/litre...12Zlr22456.htm.
The Honorable Edward J. Markey
Page 3

more than a half-a-dozen? Also, how many compensation system levels does
the typical pyramid scheme have?
b) Hypothetically, if an entity had a turnover rate in excess of 5% each quarter in
its lowest tier, would that be grounds for an investigation into whether the
entity is a pyramid scheme? What if the turnover rate was in excess of 10%?
What if it was in excess of 50%?

Response

The SEC does not maintain specific data regarding the typical number of compensation
levels or turnover rates at either MLM companies or pyramid schemes. As stated above, the
Division of Enforcement's investigations include disclosure and offering cases, and each
investigation depends on its particular facts and circumstances. In disclosure cases, we investigate
whether any statements made about the business are materially false or misleading, including
statements regarding the compensation levels or the turnover rates. In offering cases, we investigate
whether the interest acquired by the investor was a security, and the compensation level and/or
turnover rate might be relevant to that analysis. However, compensation and turnover rates would
be but two of multiple facts and circumstances used to determine whether Enforcement should
conduct an investigation.

2) How a company structures its operations typically provides insight into whether a
company is a pyramid scheme.
a) Is it accurate to state that the more complex a structure and the longer it takes
to rise through it, the more likely it is a company is a pyramid scheme?
b) Can you provide me with information about the pyramid schemes that the
Commission has prosecuted with the least complex structures, including
information about the minimum amount of time it took a distributor who
entered an entity to rise through each of the entity's compensation levels?

Response

Whether a firm is operating an illegal pyramid scheme in violation of the federal securities
laws depends on the particular facts and circumstances, including the complexity of its structure and
its disclosures concerning the structure. Although we do not have detailed information on the
minimum amount of time for distributors to rise through compensation levels, the following
Commission enforcement actions exemplify pyramid schemes involving limited complexity: SEC
v. Universo Foneclub Corporation, 06 Civ. 109040 (D. Mass.), SEC Lit Rel. No. 19715 (Jun. 1,
2006) (two levels);3 SEC v. Lane, 07 Civ. 1920 (M.D. Fla.), SEC Lit Rel. No. 20393 (Dec. 11,
2007) (four levels);4 and SEC v. West, 09 Civ. 1419 (M.D. Fla.), SEC Rel. No. 21182 (Aug. 21,
2009) (four levels).5 In each action, the defendants purported to operate legitimate MLM
companies.

3 See http://www.sec.gov/litigation/litreleases/2006/lr 19715.htm.
4 See Robert E. Lane, Wealth Pools International, Inc., and Recruit for Wealth, Inc., Defendants, and T-N-T Education Company, Inc., Richard H. Lane, Mundo Trade, Inc., Renee Becker, Julia Lane, and First Fiduciary Business Trust, Relief Defendants: Lit. R.
5 See https://www.sec.gov/litigation/litre...09/lr21182.htm.
The Honorable Edward J. Markey
Page 4

3) There have been inconsistent estimates of sales outside Herbalife's distributor network
(i.e. to people who are not distributors). Typically, the more sales occur within a
distributor network in which the products are not purchased by those who would be
expected to ultimately consume them, the more likely a company is to be a pyramid
scheme.
a) Have you investigated the fact that Herbalife's statements changed materially
over time about the percentage of sales outside the network?
i) May 1,2012 Conference Call - Pres. Des Walsh: 70% or higher
ii) May 2,2012 - 8K: We don't keep track
iii) Dec. 19,2012 - CEO Michael Johnson: 90% of customers are outside
the network - "Absolutely"
b) Do you have any idea what the accurate number of sales outside the networks
as a percentage of total sales was for each of the last five years?

Response

As stated above, the Commission's investigations are confidential and the Commission
generally neither confirms nor denies the existence of an inquiry or investigation unless and until we
bring charges against someone involved. Accordingly, we cannot comment on whether the
Commission has investigated, or is currently investigating, matters related to Herbalife.

Thank you again for your letter Please do not hesitate to contact me at (202) 551-2100, or
have your staff contact Tim Henseler, Director of the Office of Legislative and Intergovernmental
Affairs, at (202) 551--2010, if you have any questions or comments.

Sincerely,

• v —
Mary Jo White
Chair"

Original:
http://www.markey.senate.gov/imo/med..._Herbalife.pdf

ribshaw

03-05-2014, 05:03 PM

three out of four people considered “sales leaders” made less than $1,000 in compensation in 2012 Herbalife and only 6.8 per cent made more than $10,000 this way.

I stumbled on this article the other day that seems to back the above number pretty well. Years back I went to an MLM opportunity meeting, and the couple that presented had driven several states to put on the show. Do that several times and wear and tear on the car alone would top $10,000.

==========================

This sentence struck me as interesting as the "low start up" is often one of the refrains we hear with MLM. When you impute the actual cost that most would need to market it, not so much.

What kind of expenses are required to launch an effective recruitment campaign for a recruitment-focused MLM (a company that places compensation and incentive on recruiting a "down-line")? Jon Taylor estimates a minimum of $25,000 in total expenses (including incentives, products, phone, Internet, give-aways, computer supplies, advertising, travel etc.).

On average, one in 545 are likely to have profited after subtracting expenses and 997 out of 1,000 individuals involved with an MLM lose money (not including time invested)."

The Likelihood of MLM Success (http://homebusiness.about.com/od/homebusinessprofiles/a/The-Likelihood-Of-Mlm-Success.htm)

JustTooMuchTime

03-06-2014, 02:26 PM

I'm pretty sure the irony of this award being in Russia isn't lost on any of here at RS.

"For the second year in a row, Herbalife (NYSE:HLF), a leading global nutrition company, made the top 20 list of the "Best Social Projects in Russia" for its corporate social responsibility efforts in 2013.

The second annual "Best Social Projects in Russia" recognition program is conducted in collaboration with the Russian Federation government. Its main objective is to identify best practices and social projects among businesses, society and the state, and to promote socially oriented projects of companies. "

Herbalife Wins Top 20 Honors for "Best Social Projects of Russia -- 2013" - WSJ.com (http://online.wsj.com/article/PR-CO-20140306-911608.html)

JustTooMuchTime

03-06-2014, 03:04 PM

Right now, the link to the photos doesn't work. I've emailed the author. Hopefully it will be fixed soon.

Inside An Herbalife Ltd. Distribution Facility: Photos - Bloomberg (http://www.bloomberg.com/news/2014-03-06/inside-an-herbalife-ltd-distribution-facility-photos.html)

JustTooMuchTime

03-08-2014, 01:10 AM

"Herbalife Ltd. (NYSE:HLF), the highly controversial multilevel marketing company selling nutritional and weight loss products faces another foe— the Culinary Workers Union Local 226, one of the most influential unions in the country."

"Geoconda Arguello-Kline, secretary-treasurer of the Culinary Workers Union Local 226, urged Nevada Attorney General Catherine Masto and Federal Trade Commission (FTC) Chairperson Edith Ramirez to investigate the allegations that Herbalife Ltd (NYSE:HLF) is a pyramid scheme"

Full story:
Herbalife Ltd. (HLF) Powerful Union Urges FTC To Investigate (http://www.valuewalk.com/2014/03/herbalife-ltd-hlf-ftc-news/)

JustTooMuchTime

03-08-2014, 10:24 AM

I get it. To them and other investors they don't care whether or not Herbalife is a pyramid scheme or not - they just want to make money. Still, I'd like to record this recommendation here for the sake of history:

"After reviewing the quarterly reports and outlooks on the quarters ahead, the winner of this match-up is Herbalife. Nu Skin had a very impressive fourth quarter, but its outlook and delayed annual report show that the Chinese investigation has affected its operations too much. Today, Herbalife's stock sits more than 20% below its 52-week high and the majority of this weakness simply comes from the crossfire related to Nu Skin's troubles; this represents a great buying opportunity.

Along with the potential price appreciation in its stock, Herbalife will return additional cash to shareholders via its healthy 1.9% dividend and share repurchases. Foolish investors should take full advantage of the inexpensive share price of Herbalife and consider initiating positions right now."

from:
Herbalife or Nu Skin: Which Had the Better Fourth Quarter? (HLF, NUS) (http://www.fool.com/investing/general/2014/03/08/herbalife-or-nu-skin-which-had-the-better-fourth-q.aspx)

NikSam

03-08-2014, 11:12 AM

I get it. To them and other investors they don't care whether or not Herbalife is a pyramid scheme or not - they just want to make money. Still, I'd like to record this recommendation here for the sake of history:

from:
Herbalife or Nu Skin: Which Had the Better Fourth Quarter? (HLF, NUS) (http://www.fool.com/investing/general/2014/03/08/herbalife-or-nu-skin-which-had-the-better-fourth-q.aspx)

What happens on stock market should not be called "investing" at least since 1901.
Price moves (up/down) , dramatic jumps is what makes money to traders (there are no "investors" in its natural form)
The stability and slowly growing stock which already accumulates all the future expected earnings in it's price are not attractive and hard to score on.
Even kids can do fundamental analysis now, Buy & Hold strategies stopped working long ago, add computers to the mix and noone can make any money by "investing" in stocks , only if they know something which most do not, or belive in something but that is not investing but betting.

Smart traders do not care what HLF even does or not. They do not care if it dies. They do not even care if it exists.
All they knew that after Ackman exposure on HLF , stock would drop and they knew that HLF will be fighting back and try to restore its image, that did make a great ride. When things will get clearer they would not mind shorting the hell out of HLF. All those earnings estimates are for fundamentalists who rarely make any money at all.

JustTooMuchTime

03-08-2014, 11:35 AM

What happens on stock market should not be called "investing" at least since 1901.
Price moves (up/down) , dramatic jumps is what makes money to traders (there are no "investors" in its natural form)
The stability and slowly growing stock which already accumulates all the future expected earnings in it's price are not attractive and hard to score on.
Even kids can do fundamental analysis now, Buy & Hold strategies stopped working long ago, add computers to the mix and noone can make any money by "investing" in stocks , only if they know something which most do not, or belive in something but that is not investing but betting.

Smart traders do not care what HLF even does or not. They do not care if it dies. They do not even care if it exists.
All they knew that after Ackman exposure on HLF stock would drop and they knew that HLF will be fighting back and try to restore its image, that did have a great ride. When things will get clearer they would not mind shorting the hell out of HLF. All those earnings estimates are for fundamentalists who rarely make any money at all.

Excellent points!

JustTooMuchTime

03-08-2014, 01:51 PM

Babener wrote an article about Personal use and Chang wrote a rebuttal. Worth the read:

Babener:

"HERBALIFE: WHAT SHORT SELLERS MISSED ON THE WAY TO THE PRESS CONFERENCE …
The Personal Use Issue in Pyramid Analysis Who is an Ultimate User?"

MLM Law Cases: Herbalife Personal Use Issue - by Jeff Babener, MLM Lawyer (http://www.mlmlegal.com/herbalife%20Personal%20Use.html)

After Chang's disclaimer:

"First, a disclaimer. I am not a lawyer, nor do I play one on TV. I'm just a junior skeptic. So my observations on Mr. Babener's bias will not be about his legal analysis... but his biases."

One of many (potential) biases in Babener's legal analysis Chang points to:

"Mr. Babener then tried to build a case about how Self-consumption is being recognized on a state level and even to a limited extent by the FTC. He, however, failed to note that it was the DSA's own lobbying effort that is pushing that agenda. And what constitutes "reasonable self-consumption" was left up in the air. A trend is not always right, and this is strangely suggestive of bandwagon fallacy."

A (MLM) Skeptic: Are You Aware of Your Own Bias? How About MLM Lawyers? (http://amlmskeptic.blogspot.com/2013/09/are-you-aware-of-your-own-bias.html)

JustTooMuchTime

03-09-2014, 03:18 PM

Info from article by Svea Herbst-Bayliss

"Reuters) - Hedge fund manager William Ackman, who is betting $1.16 billion that Herbalife is a fraud, spent $264,000 last year on lobbyists to press his case against the company, according to government documents filed in recent weeks.

That amount is dwarfed by the nearly $2 million Herbalife spent in 2013 on federal lobbying as the nutrition and weight loss company fought the billionaire investor's claims it runs a pyramid scheme. In an illegal pyramid scheme members earn more for recruiting new members into the scheme than for selling the products outside the network."

The article details which groups the money was spent on."

Full article:

Ackman outspent by Herbalife in lobbying battle | Reuters (http://www.reuters.com/article/2014/03/09/us-herbalife-idUSBREA280OH20140309)

JustTooMuchTime

03-10-2014, 11:27 AM

From an article in the NY times. This part is especially "wonderful":

" A Lack of Victims

The Nevada attorney general, Catherine Cortez Masto, was among the many officials who found herself enmeshed in the debate. But as the fight unfolded, with Latino groups holding a news conference in East Las Vegas demanding that she investigate Herbalife, she had some questions.

She says she was struck by the appeals for an investigation of Herbalife, at first directly from representatives for Mr. Ackman’s firm and then from others: All three of the letters from nonprofit groups demanding an investigation were identical — except they were signed by three different Hispanic community leaders, each on a different letterhead.
Continue reading the main story

When Ms. Masto invited the Hispanic leaders to meet with her individually, none of them could identify a victim of abusive practices.

“We are not going to move forward unless we have victims,” she told the community leaders."

Here's a tip Ms. Masto: Internet 101 (http://www.internet101.org/)

http://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will-fail-then-ackman-lobbying-to-bring-it-down.html?_r=0

JustTooMuchTime

03-10-2014, 02:50 PM

"Monday's Times article, headlined "After Big Bet, Hedge Fund Pulls the Levers of Power," notes Mr. Ackman's "extraordinary attempt to leverage of corridors of power - in Washington, state capitols and city halls - for his hedge fund's profit."

In response to the article, Herbalife said there should now be no question about Mr. Ackman's motives.

"Ackman's unprecedented campaign to destroy Herbalife has now been exposed for what it is: a cynical, self-serving attempt to manipulate the market by buying his way into an investigation to cover his own reckless $1 billion bet," the company said."

original story:
Herbalife Again Defends Business Model - WSJ.com (http://online.wsj.com/news/articles/SB10001424052702303795904579431221527621230?mg=ren o64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB1000 1424052702303795904579431221527621230.html)

Herbalife's short-term memory gag:
Herbalife donated money to 5 supportive Hispanic groups | New York Post (http://nypost.com/2014/02/26/herbalife-donated-money-to-5-supportive-hispanic-groups/)

Suggestion for Herbalife if they fail to disclose money donated to supportive groups in the future:

http://www.youtube.com/watch?v=l00GGEy_72c

JustTooMuchTime

03-10-2014, 04:58 PM

"Investor Carl Icahn discusses Bill Ackman's battle to bring down Herbalife. Icahn says Ackman's attack is unfounded, relentless and fraudulent."

...And almost borders on the insane:

Icahn: Ackman's Herbalife attack borders on insane | Watch the video - Yahoo Finance (http://finance.yahoo.com/video/icahn-ackmans-herbalife-attack-borders-165100018.html)

JustTooMuchTime

03-10-2014, 05:03 PM

"Billionaire Bill Ackman, who will make a presentation tomorrow on Herbalife Ltd.’s Chinese operations, said he plans to discuss company documents obtained from a former employee.

Ackman believes the documents will show that Herbalife violated China’s laws regulating direct selling and multilevel marketing, the hedge fund manager said today in an interview. He declined to elaborate. The webcast presentation is scheduled for 2 p.m. New York time. "

Ackman to Show Internal Documents in Herbalife China Webcast - Bloomberg (http://origin-www.bloomberg.com/news/2014-03-10/ackman-says-herbalife-china-webcast-to-reveal-internal-documents.html)

JustTooMuchTime

03-10-2014, 05:06 PM

"Questioning Bill Ackman's Herbalife profit motive
By Stephen Gandel, senior editor March 10, 2014: 2:59 PM ET

"The Times seems to have spent a fair amount of time reporting the story. It has a triple byline, and it includes a comparison of five letters signed by others sympathetic to Ackman's cause that suggests that they may have all been written by the same person. (Someone who works for Ackman? The article doesn't say, but that's where the reader is being led.) One of the letters is signed by someone who claims it wasn't written or sent by him.

And yet there's almost nothing in the article about whether Herbalife is indeed a pyramid scheme. Nor does it address the veracity of any of Ackman's other allegations about the company. The Times just says in passing that others have made similar claims about the company. It also says that it has been hard for others to find Herbalife victims. But it doesn't say whether it tried. Isn't that what journalists do better than others, particularly the Times?"

Questioning Bill Ackman's Herbalife profit motive - The Term Sheet: Fortune's deals blogTerm Sheet (http://finance.fortune.cnn.com/2014/03/10/bill-ackman-herbalife-ny-times/)

JustTooMuchTime

03-10-2014, 05:12 PM

Ackman Tuesday March 11, 2014 Conference Call and Webcast 2:00 PM EDT

Herbalife in China Event Registration | Facts About Herbalife (http://factsaboutherbalife.com/webcast-registration/)

JustTooMuchTime

03-10-2014, 07:15 PM

Press release from Pershing Square:

"Pershing Square believes that Herbalife is a pyramid scheme based on over two years of research. We continue to share our research and findings with regulators, policymakers, law enforcement and other interested parties to shine a light on the company's and its distributors' illegal practices.

In an article today, Herbalife's Chief Financial Officer, John DeSimone, told the New York Times that Pershing Square's "accusations are provably false." Yet, Herbalife has failed to respond to basic questions that we and others have continued to raise.

Herbalife has refused to release actual retail sales information that it requires its distributors to maintain, instead relying on third party survey data. Herbalife has refused to address the documented false and misleading sales practices plied by its senior-most distributors, including John Tartol, a current member of Herbalife's Board of Directors. Despite documented evidence to the contrary, Herbalife continues to deny that it targets minority communities, including Latinos throughout the United States. Moreover, Herbalife continues to deny that its pays recruiting rewards, despite the fact that recruiters are paid cash commissions when a new distributor qualifies for the business opportunity through mandatory inventory purchases.

Tomorrow, at 2:00 p.m. EDT we will present evidence of Herbalife's violations of laws in China.

We look forward to Herbalife's evidence that our accusations are "provably false.""

nomaxim

03-12-2014, 03:53 PM

This is just now hitting the news services.

BBC News - US regulator launches Herbalife investigation (http://www.bbc.com/news/business-26553715)

Herbalife Comments On FTC Inquiry (NYSE:HLF) (http://ir.herbalife.com/releasedetail.cfm?ReleaseID=832283)
http://i192.photobucket.com/albums/z149/Oolam/herbalife1_zps2140b52f.png (http://s192.photobucket.com/user/Oolam/media/herbalife1_zps2140b52f.png.html)

NikSam

03-12-2014, 04:00 PM

Oh, such a great ride on the NYSE today :)

7208

scratchycat

03-13-2014, 09:11 AM

This story was actually on the network news this morning and I was surprised to see the coverage. Not all of them have picked up on it yet but a Google search came up with this article. Must be the same as covered by BBC from #60.

This one was CNBC Herbalife says FTC opens inquiry; shares slump (http://www.cnbc.com/id/101464747)

Looks like they have their distributors all over the comments.

scratchycat

03-13-2014, 10:09 AM

Just received notification from one of my favorite blogs covering the latest news. I still get zero notifications from RS.

ASDUpdates.com » Blog Archive » Reuters: Herbalife admits FTC Inquiry (http://asdupdates.com/wordpress/archives/5265)

JustTooMuchTime

03-14-2014, 01:43 AM

"(Reuters) - Nutritional products company Herbalife Ltd (HLF.N), which is being investigated by the Federal Trade Commission, said it postponed its annual shareholders' meeting to April 29 to continue discussions with Carl Icahn about new board nominees.

The meeting was originally scheduled for April 24.

Herbalife shares were up about 1 percent in extended trading on Thursday.

Carl Icahn, the company's biggest shareholder with a 16.8 percent stake, has supported Herbalife in its fight against billionaire investor William Ackman.

Ackman's Pershing Square Capital Management believes Herbalife is an unsustainable pyramid scheme destined to collapse. Icahn has contended that it is a good company with good management.

Herbalife gave Icahn two board seats in February 2013 and the right to raise ownership of the company to 25 percent.

The activist investor's publicly traded investment vehicle Icahn Enterprises' (IEP.O) new Chief Executive Keith Cozza is already a director on Herbalife's board.

Herbalife shares closed at $57.31 on the New York Stock Exchange.

(Reporting by Mridhula Raghavan in Bangalore; Editing by Joyjeet Das)"

Herbalife postpones shareholders meeting to April 29 | Reuters (http://www.reuters.com/article/2014/03/13/us-herbalife-icahn-agm-idUSBREA2C28Q20140313)

littleroundman

03-14-2014, 02:02 AM

One would hate to think Icahns' very public increasing involvement will have an effect on any ongoing FTC investigation.

JustTooMuchTime

03-14-2014, 09:43 PM

"They are worried about state attorney generals [sic] coming in there and launching piggyback probes off this. It’s a huge worry inside the company,” said Charles Gasparino on the Fox Business News, who has contacts inside the company. “They are worried that this is going to be a year of hell for Herbalife shareholders that the stock is going to continue to get hit on these probes.”

Full article:
Herbalife Ltd. (HLF) Allegedly Worried About (http://www.valuewalk.com/2014/03/herbalife-ltd-hlf-ftb-probe/)

JustTooMuchTime

03-14-2014, 09:50 PM

"Wednesday's announcement by nutrition company Herbalife should have MLS executives scrambling to do damage control."
...

"This isn't just any soccer club caught up in a potential fiscal fiasco – this is the face of the league. The Galaxy's success has been a primary booster for the national and global MLS brand; as the team wrote in its 2012 press release announcing the sponsorship extension: “The Galaxy have emerged as a truly international brand with worldwide recognition. The club continues to be the benchmark by which all others are measured in Major League Soccer.”

Herbalife is the official jersey sponsor of the Galaxy, who have several players on the list of the top-selling MLS jerseys. The partnership had only grown stronger in recent months, highlighted by the October launch of the “Be a Pro” Web series, a dual effort to enter the arena of branded content."

Full story:

http://www.contracostatimes.com/business/ci_25343345/mls-potential-black-eye-herbalife

JustTooMuchTime

03-15-2014, 04:13 PM

"Michael Araujo, a 60-year-old Norton resident, said the $130,000 cited by Markey is an inflated number that includes rent payments and other living expenses he incurred after he was laid off in 2010 from his job as a vice president of contract management at a bank. He said the senator’s staff relied on information provided by his wife, who did not work on the business.

'I think she exaggerates sometimes,' said Araujo, who did not speak with anyone on Markey’s staff.'"

Senator Edward Markey did little to vet claims of constituents he cited as victims of Herbalife sales practices - Nation - The Boston Globe (http://www.bostonglobe.com/news/nation/2014/03/14/senator-edward-markey-did-little-vet-claims-constituents-cited-victims-herbalife-sales-practices/RuIG4D1ABp3hmOTXxQ0oWK/story.html)

Thanks for the important "fact finding" story Noah Bierman.

Meanwhile, on planet Earth...

The Salty Droid – Herbalife :: Profit and Loss (http://saltydroid.info/herbalife-profit-and-loss/)

JustTooMuchTime

03-16-2014, 03:00 PM

Joan Vennochi, a writer for the Boston Globe sticks with the easy story "Don’t let Markey hedge on Herbalife" while (intentionally?) ignoring the elephant in the room.

Douglas Brooks, says:

"Mr. Bierman deserves kudos for a good piece of reporting on Senator Markey and Herbalife.

Both of you, however, have missed the bigger story, and it does involve lobbying. In 2006, when the Federal Trade Commission first proposed its Business Opportunity Rule, the regulation would have required MLM firms to make some minimal disclosures concerning their business opportunities to prospective distributors. The MLM industry, led by Herbalife, waged an intensive, multi-million dollar lobbying campaign to win an exemption from the Biz Op Rule, arguing that being required to disclose the truth about distributor attrition rates and losses would hurt their business.

The losses suffered by victims of MLM scams are persistent and real. I and a few other consumer advocates have been advocating for better regulation and disclosure in the MLM industry for almost twenty years, but until Mr. Ackman got involved the lobbying efforts of Herbalife and other MLM firms had prevented any effective regulation.

As an example of the losses suffered by MLM distributors I can refer you to an Affidavit filed by a class action claims administrator in a case I litigated against Herbalife about 10 years ago. It is no longer available on PACER or on the FTC’s site (where I filed it) but is available here: http://factsaboutherbalife.com/wp-content/uploads/2012/12/Declaration-of-Michael-Rosenbaum-on-behalf-of-Claims-Administrator-sworn-to-August-23-2005.pdf The Affidavit explains how the claims administrator evaluated the claims, based on data from income tax returns, and lists the allowed claims, many of which are in the tens of thousands of dollars. A total of approximately 2400 class members suffered losses of approximately $19 million.

I can also refer you to a white paper on MLM regulation that two of my colleagues and I just completed and forwarded to Senator Markey’s office. It is available at http://pyramidschemealert.org/wordpress/wp-content/uploads/2014/03/The-Pyramid-Scheme-Industry-FINAL.pdf The white paper details how MLM loss rates are typically in the range of 99% and how current FTC enforcement policy is not sufficient to protect consumers.

I have met Mr. Ackman but I do not represent him and was not “lobbied” by anyone to write this comment."

And as another commenter said:

" BrooklineTom03/16/14 10:48 AM

Horsefeathers. Conspicuously absent from this column is the fundamental truth about Herbalife -- it is a pyramid scheme based on snake-oil. Ms. Vennochi joins Mr. Bierman in ignoring the obvious in their desire to score points with right wing. Those who find this kind of investing unsavory should perhaps focus their attention on hedge funds and how they make money, and live politics and politicians out of it.

The most obvious explanation for this "scandal" is that Herbalife is an over-valued scam on the verge of collapse -- making it a prime target for market manipulators like Mr. Ackman. That same reality makes it a clear and present threat to consumers -- making it a prime target for a Senator doing a fine job of protecting the interests of his constituents from fraud and near-fraud.

Mr. Ackman and Mr. Markey probably also agree that the Apollo program put astronauts on the moon. Neither set of facts is a conspiracy to defraud the public, and neither is any sort of scandal."

Original Op-ed "piece":

Don’t let Markey hedge on Herbalife - Opinion - The Boston Globe (http://www.bostonglobe.com/opinion/editorials/2014/03/15/don-let-markey-hedge-herbalife/xo9kRuA1vuWuFLBaDH80kK/comments.html)

It seems as if something is rotten in the state of Denmark.

JustTooMuchTime

03-16-2014, 08:59 PM

"Ackman’s presentation came along. In the time since, Keep has become more active in the field. In the past year, he twice wrote to the FTC, one of the principal authorities in policing product-based pyramid schemes, and urged it to strengthen its regulations of the direct sales industry to squeeze out fraudsters.

"The rule of caveat emptor cannot be the main line of protection for people who have fewer life-changing opportunities and are attracted to seemingly lucrative schemes that rely on asymmetric information and labyrinth-like compensation structures," he wrote in June of last year.

In return, Keep said he received "some namby-pamby response" from the agency, highlighting some of the recent cases it has brought against alleged pyramid schemes.

Despite the billions of dollars at stake in the Herbalife debate, Keep says he has no interest other than seeing pyramid schemes pushed out of the industry."

In Ackman vs. Herbalife drama, NJ professor gets cameo role

In Ackman vs. Herbalife drama, NJ professor gets cameo role | NJ.com (http://www.nj.com/business/index.ssf/2014/03/herbalife_ackman_pershing_square_nj_professor_tcnj _ftc_mlm.html)

JustTooMuchTime

03-17-2014, 05:05 PM

"Markey sits on two Senate committees focused on business and commerce, so how could he have missed one of the biggest Wall Street stories over the past 15 months"

"why would Ackman and his lobbyists approach the senator in the first place to pursue an investigation of Herbalife as a pyramid scheme? Certainly not for the common good. You don’t make billions of dollars doing that."

Markey, the hedge fund, and Herbalife: Oh, there’s a scheme here, all right - Letters - The Boston Globe (http://www.bostonglobe.com/opinion/editorials/2014/03/16/markey-hedge-fund-and-herbalife-there-scheme-here-all-right/f3btzp2T4DnsHZO6vJPVfI/story.html)

JustTooMuchTime

03-17-2014, 05:19 PM

Good article by Jonathan Weil at BloomBergView about (possibly) why Herbalife waited to release information about the FTC investigation.

Herbalife Realizes Some Questions Need Answering - Bloomberg View (http://www.bloombergview.com/articles/2014-03-17/herbalife-realizes-some-questions-need-answering)

JustTooMuchTime

03-17-2014, 06:20 PM

"By Svea Herbst-Bayliss

The Massachusetts Republican candidate for Democratic U.S. Senator Edward Markey's seat on Monday filed an ethics complaint against his rival on the grounds he may have acted improperly in asking regulators to investigate nutrition company Herbalife."

"All you have to do is connect the dots to easily see that Senator Markey used his public office to manipulate the stock of a publicly traded company in order to financially benefit a campaign donor," Herr said."

"Ackman, who runs the $12 billion hedge fund Pershing Square Capital Management, donates money to both main political parties. In 2013, he gave $32,400 to the Democratic Senatorial Campaign Committee. He donated $20,000 to the National Republican Senatorial Committee in 2012, according to the Center for Responsive Politics, which tracks campaign donations."

Full story:
Republican lodges ethics complaint against rival over Herbalife (http://news.yahoo.com/republican-lodges-ethics-complaint-against-rival-over-herbalife-212558784--sector.html)

JustTooMuchTime

03-18-2014, 12:11 PM

"Ackman’s campaign against Herbalife, which he calls a pyramid scheme, has not faded away. Instead, Ackman has reclaimed the momentum in the war over the diet shake seller. Shares of Herbalife fell by 7.8% on Monday and have now plunged by 32% in 2014. Ackman’s big short position against Herbalife has helped fuel his Pershing Square’s returns this year. That is pretty much the opposite of how 2013 went for Ackman, when the returns of his hedge fund were drastically hurt by the nearly 140% increase in Herbalife’s stock."

Bill Ackman's Herbalife Short Bet Gets 30 Percent Better - Forbes (http://www.forbes.com/sites/nathanvardi/2014/03/18/bill-ackmans-herbalife-short-bet-gets-30-percent-better/)

Whip

03-18-2014, 01:11 PM

How is he not in trouble for stock manipulation?

JustTooMuchTime

03-18-2014, 03:24 PM

How is he not in trouble for stock manipulation?

My (limited) understanding of that issue is that if Ackman truly believes Herbalife is a fraud then lobbying for investigations, etc. isn't stock manipulation.

There's a piece about that here:

http://finance.fortune.cnn.com/2014/03/10/bill-ackman-herbalife-ny-times/

JustTooMuchTime

03-18-2014, 04:12 PM

Not much new here, but a good, quick summary of FTC rulings (that have all been discussed here):

"Keep and others argue that the FTC’s Civil Investigative Demand last week likely demands that Herbalife come clean about its retail sales. While Herbalife’s promotional materials claim that the company "offers compensation that is directly linked to the generation of product sales," it hasn’t bothered to prove as much; it has, in fact, declined to publicly disclose information about retail sales.

The FTC, shut in a room with Herbalife, is likely asking why."

FTC investigation could topple Herbalife's alleged pyramid scheme | The Verge (http://www.theverge.com/2014/3/18/5521402/secret-pyramid-files-what-does-the-ftc-want-from-herbalife)

Whip

03-18-2014, 05:46 PM

My (limited) understanding of that issue is that if Ackman truly believes Herbalife is a fraud then lobbying for investigations, etc. isn't stock manipulation.

There's a piece about that here:

Questioning Bill Ackman's Herbalife profit motive - The Term Sheet: Fortune's deals blogTerm Sheet (http://finance.fortune.cnn.com/2014/03/10/bill-ackman-herbalife-ny-times/)

Don't tell clem that.

JustTooMuchTime

03-20-2014, 06:53 PM

"Why Ackman is right on Herbalife
Opinion: FTC probes activist investor’s claims of a pyramid scheme
by Nat Worden

As the battle between Herbalife and fund manager Bill Ackman plays out in the press, it was refreshing to see the Federal Trade Commission cut through the media sniping last week and do its job"

" It has all the earmarks of a pyramid scheme, which is defined as an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the sales force, rather than supplying any real investment or sale of products or services to the public. The early entrants at the top of the pyramid can make fabulous amounts of money as long as unwitting newbies at the bottom get duped into participating and roping others into making the same mistake.

If Ackman is right about Herbalife, the company is preying on the bleak financial circumstances facing many consumers. Frequently, it’s targeting low-income, uneducated people and using the allure of a better life to fool them into investing what little money they have in a mirage that will probably never pay off. And a large array of the Herbalife marketing material (https://www.youtube.com/watch?v=KMORfP-OAaw) that’s available leaves an impression that this is going on. "

Full story...

Why Ackman is right on Herbalife - Outside the Box - MarketWatch (http://www.marketwatch.com/story/why-ackman-is-right-on-herbalife-2014-03-20)

JustTooMuchTime

03-21-2014, 01:29 AM

"Senator Ed Markey lauded for championing cause of the consumer

We write to express our support for Senator Edward Markey’s request to the Federal Trade Commission to open an inquiry into allegations from consumers that the maker of dietary supplements, Herbalife, may be a pyramid scheme. The senator is a longstanding consumer champion with whom we have worked closely for decades in our capacity as consumer advocates."

"Knowing Ed Markey’s lifelong record of championing consumer causes, we reject the suggestion that he’s motivated by money or working to promote the interests of a hedge fund. His only priority has always been protecting consumers.

Sally Greenberg, Executive director National Consumers League
Gene Kimmelman, President and CEO Public Knowledge
Joan Claybrook, President emeritus Public Citizen Washington"

Full letter:
Markey lauded for championing cause of the consumer - Letters - The Boston Globe (http://www.bostonglobe.com/opinion/editorials/2014/03/20/markey-lauded-for-championing-cause-consumer/LUaaMyBtkb4LruwEmLhnzI/story.html)

JustTooMuchTime

03-21-2014, 10:13 AM

"Another development in the Bill Ackman / Herbalife Ltd. (NYSE:HLF) kerfuffle. In a politely-worded letter that is ostensibly a friendly bit of advice, Ackman warns the board of directors that they may be personally on the hook for the results of their share repurchase program if the company is indeed found to be an illegal pyramid scheme."

Full text of Ackman's letter the board is here:
Ackman Letter To Herbalife Ltd. (HLF) Board (http://www.valuewalk.com/2014/03/ackman-letter-herbalife-ltd-hlf-board/)

Previous letter warns Board of Directors their D&O Insurance (Directors and Officers Insurance) may be worthless:

"As directors of a fraudulent public company, you will be held liable, at a minimum, for monetary damages, unless you have met the high standards that apply to a director's performance. You may believe that the likelihood of facing monetary liability if Herbalife were declared an illegal pyramid scheme is slight in light of the D&O coverage that Herbalife has undertaken for your benefit, exculpation clauses in the Company's organizational documents that purport to exculpate you from liability, and indemnification agreements between you and the Company.

If, however, Herbalife were declared an illegal pyramid scheme - and we believe it should and will be - your insurance, exculpation and indemnification protections will be worthless, as will Herbalife. Your D&O coverage will likely be of no value if the Board knowingly allows fraudulent activity to continue. In this case, the Board will not be entitled to insurance coverage and the exculpatory provisions of the Company's organizational documents will not be available for violations of the duty of good faith or the duty of loyalty. Herbalife's indemnification obligations will be obligations of an insolvent company - a risk exacerbated by the Company's ongoing share repurchase program and possible upcoming leveraged recapitalization, which will diminish assets available not only to protect victims of the Company's misconduct, but also to provide indemnification protection to the Board.

Unlike virtually all reputable U.S. public companies, which are incorporated in Delaware or other domestic jurisdictions, Herbalife is organized as an offshore, Cayman Islands company. Nevertheless, it is likely that the Cayman Islands courts will look to Delaware law, as it is the most highly developed body of corporate law. It is well settled under Delaware law that a board of directors is grossly negligent if it does not establish and monitor the company's information and reporting systems to assure that the business is being conducted properly and legally. For example, in the Caremark case, the court stated "a director's obligation includes a duty to attempt in good faith to assure that a corporate information and reporting system, which the board concludes is adequate, exists, and that failure to do so under some circumstances may, in theory at least, render a director liable for losses caused by non-compliance with applicable legal standards." In re Caremark Int 7, Inc. Derivative Litig., 698 A.2d 959 (Del. Ch. 1996); see also Stone ex rel. AmSouth Bancorp v. Ritter, 911 A.2d 362 (Del. 2006)."

The full letter is here:

http://ify.valuewalk.com/wp-content/uploads/2014/03/213635162-Letter-to-Herbalife-Board-of-Directors.pdf

JustTooMuchTime

03-21-2014, 05:41 PM

Nothing really new here, but worth repeating:

"FTC filed a complaint against Burnlounge in 2009, alleging that it is a pyramid scheme. Burnlounge is an online music company which sells music through what it calls “burnpages.” The company gets most of its money by charging for premium services. These services allow members to earn cash for recruiting new members to the service. Five years after the case was filed, an appeals court ruled against Burnlounge and levied a $17 million judgment against the company.

However, the case is up on appeal again, this time because of a one in the final judgment. The court defined exactly what it meant by the term “pyramid scheme.” The line highlighted by McCrum is: “For purposes of this definition, ‘sale of products or services to ultimate users’ does not include sales to other participants or recruits or to the participants’ own accounts.”

Full story:
Herbalife Ltd. Could Be Hurt By Ruling In Case Against Burnlounge (http://www.valuewalk.com/2014/03/herbalife-ltd-hlf-hurt-ruling-case-burnlounge/)

JustTooMuchTime

03-21-2014, 05:45 PM

"While Herbalife said in a regulatory filing that talks between it and Icahn over an added board seat were ongoing, it was not known that the Los Angeles company had approached Icahn about the issue soon after it learned of the Federal Trade Commission probe.

While Icahn, who has a 17 percent stake in the distributor of weight-loss shakes, has not made up his mind yet on whether he will name an added board member, he has determined he will not buy more Herbalife shares as part of that deal, sources said."

Full story:

Icahn may add reps to Herbalife board but won’t add to stake | New York Post (http://nypost.com/2014/03/20/icahn-may-add-reps-to-herbalife-board-but-wont-add-to-stake/)

JustTooMuchTime

03-21-2014, 05:46 PM

Full text of Ackman's letter the board is here:
Ackman Letter To Herbalife Ltd. (HLF) Board (http://www.valuewalk.com/2014/03/ackman-letter-herbalife-ltd-hlf-board/)

Previous letter warns Board of Directors their D&O Insurance (Directors and Officers Insurance) may be worthless:

The full letter is here:

http://ify.valuewalk.com/wp-content/uploads/2014/03/213635162-Letter-to-Herbalife-Board-of-Directors.pdf

According to this article (http://nypost.com/2014/03/20/icahn-may-add-reps-to-herbalife-board-but-wont-add-to-stake/):

"One source close to the board said Ackman’s letters were discussed in board meetings last year but were dismissed as “scare” tactics."

JustTooMuchTime

03-21-2014, 07:27 PM

Love this article!

"According to some stories (http://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will-fail-then-ackman-lobbying-to-bring-it-down.html?action=click&module=Search&region=search Results%230&version=&url=http%3A%2F%2Fquery.nytime s.com%2Fsearch%2Fsitesearch%2F%3Faction%3Dclick%26 region%3DMasthead%26pgtype%3DHomepage%26module%3DS earchSubmit%26contentCollection%3DHomepage%26t%3Dq ry335%23%2Fackman&_r=0) , Bill Ackman, a green man with a heart two sizes too small, unfairly manipulated the political process to his advantage. Such stories argue that: a) this represents a stunning departure from the past behaviors of other green men and women (mostly men), and b) Herbalife and potentially other MLMs will now be subjected to unfair scrutiny. Of course, both arguments are hogwash."

"we hear pious outrage from some of these same investors and media. During this past year, I spoke with dozens of investors. Some small percentage actually wanted to know how we got to this point: How could the legitimacy of a 33-year old company be questioned? And by extension: What do we know or not know about the MLM industry? Most couldn't care less; they simply wanted to time their entry and exit from the market. To be fair, that is what they get paid to do. I get that. But then be what you are, and don't pretend to take on the false mantle of moral outrage."

Worth reading the whole thing!

Read more: Herbalife, MLMs And The Unhappy Folks Of Whoville - NASDAQ.com (http://www.nasdaq.com/article/herbalife-mlms-and-the-unhappy-folks-of-whoville-cm337555#ixzz2we9qVYXT)

JustTooMuchTime

03-21-2014, 07:35 PM

"My bias against Herbalife, Nu Skin Enterprises , Avon and especially Amway stems from the countless number of times I've been approached with an "investment opportunity."

That said, joining one of the above or the many others isn't substantially different from becoming a real estate or insurance salesperson. Real estate and insurance people are normally considered independent contractors who start out losing money and have a small chance of becoming successful. "

...Says Robert Weinstein writing for The Street (http://business-news.thestreet.com/philly/story/handicapping-herbalife/12538657). Insurance salespersons make their money by buying insurance from themselves.

Or, to reiterate what the SaltyDroid said (http://saltydroid.info/herbalifes-bankruptcy-business/):

"If you buy pants from the store :: then you’ll have pants … but no money. If you buy pants from yourself :: then you’ll have pants … and money! It’s a win win :: for you … and yourself. Whoever thought up this whole “just buy **** from yourself” thing … should give themselves the Nobel Prize in imaginary economics."

Of course we don't know if that's definitively true or not yet...because Herbalife won't give us the numbers to LET us know!

JustTooMuchTime

03-21-2014, 07:44 PM

"Herbalife fell to a eight-month low of $49.54 today, approaching the level when Ackman first put on his trade. The hedge-fund manager started what would become a $1 billion bet against the stock in May 2012, he has said, before disclosing it on Dec. 19 of that year. During that period the stock was trading at an average price of $48.58. Ackman has since restructured his Herbalife wager using long-term put options, making an exact determination of his break-even point difficult. "

Ackman (http://www.bloomberg.com/news/2014-03-21/ackman-s-pershing-near-break-even-on-losing-herbalife-bet.html)

JustTooMuchTime

03-22-2014, 07:09 PM

"Argus analyst John Staszak explains why he cut Herbalife to Hold from Buy:

[Herbalife] shares are trading at 8.6-times our revised 2014 EPS estimate, toward the low end of the historical average range of 6-23 and below the peer group average of 15. The company posted strong results in 2013, and we believe that its core business remains solid…

However, [Herbalife] shares have fallen sharply over the last week, and we believe that they are unlikely to recover until the [FTC] investigation is completed. We also note that only 20% of the company’s business is in the U.S and that additional scrutiny of its operations by other nations could hurt the shares. If the FTC investigation turns out favorably for Herbalife, we would consider returning the stock to our BUY list."

Only 20% of HLF business is in the U.S. Didn't know that. Crazy, but makes perfect sense.

Herbalife: No Recovery Until Investigation Ends - Stocks To Watch - Barrons.com (http://blogs.barrons.com/stockstowatchtoday/2014/03/21/herbalife-no-recovery-until-investigation-ends/)

Whip

03-22-2014, 09:59 PM

I didn't either but it's very telling.

JustTooMuchTime

03-23-2014, 02:25 AM

I didn't either but it's very telling.

Yep. That's what I was thinking, too.

JustTooMuchTime

03-24-2014, 06:40 PM

From Businessweek:

"'Inviting Icahn into your board room to keep Ackman out is like inviting Hell’s Angels into house to guard you against angry librarians,” he said.

Icahn may eventually want to push out Herbalife’s management to help boost the company’s value, Gordon said.

“With five directors, he needs to convince only two of the remaining eight to join him in changing management or anything else,” Gordon said. “He got closer without having to buy additional shares or engage in an expensive proxy battle.'"

Herbalife Strengthens Ties With Icahn as Ackman War Rages - Businessweek (http://www.businessweek.com/news/2014-03-24/herbalife-to-nominate-three-more-icahn-candidates-to-board#p2)

JustTooMuchTime

03-25-2014, 03:54 PM

"Herbalife's site, iamherbalife.com, describes Ackman's claims as misleading and features a link to dozens of testimonials from users touting the company's products and how healthy they are after taking them.

It adds that there is no guarantee of success as a distributor, contrasting with some of its promotional videos showing distributors riding snowmobiles and horses, talking about their lavish lifestyles and how others can copy them.

Herbalife writes on the site that it is a "legitimate multi-level marketing company" focused on selling its shakes and powders to people who want to consume them. It also makes clear that Ackman will make money if Herbalife's share price falls and could lose money if it climbs."

Full Story:
Herbalife launches website to counter pyramid scheme claims | Reuters (http://www.reuters.com/article/2014/03/25/herbalife-website-idUSL1N0MM1NA20140325)

Whip

03-25-2014, 04:34 PM

Herbalife writes on the site that it is a "legitimate multi-level marketing company" focused on selling its shakes and powders to people who want to consume them.

If that were true, they wouldn't need to be MLM

JustTooMuchTime

03-29-2014, 06:34 PM

"Herbalife Ltd. (NYSE:HLF) changing their messaging? Both the distributors and Carl Icahn seem confused. We look at the evolving Herbalife message and specifically look at comments which Carl Icahn has made."

Must read:

Herbalife Ltd. (HLF): A Changing Message To Distributors? (http://www.valuewalk.com/2014/03/herbalife-ltd-hlf-distrubtors/)

JustTooMuchTime

03-29-2014, 06:35 PM

"Herbalife Appoints former Senator Reid Senior Advisor as Vice President, Community Engagement and Health Policy

Mon March 24, 2014 4:40 PM|Business Wire | About: HLF

LOS ANGELES--(BUSINESS WIRE)-- Global nutrition company Herbalife (HLF) announced today that Angela Arboleda, joins the company in the newly created role of vice president, community engagement and health policy. Arboleda will work out of Herbalifes Washington, D.C. office and will report to Amy Greene, vice president, government corporate and investor relations.

Arboleda will be responsible for external relations activities including managing Herbalifes third-party relationships in minority communities including Hispanic, African American and Asian American. In addition, Arboleda will serve as the lead lobbyist for Democratic outreach and work on a variety of policy issues for the company.

Arboleda joins Herbalife after a 17-year career in public service most recently as senior policy advisor for Latino and Asian-American Affairs for the Office of Senate Majority Leader Harry Reid (D-NV), where she served as the liaison to the Congressional Hispanic Caucus and the Congressional Asian Pacific American Caucus working directly with the Members of Congress. She also developed policy and messaging that conveyed the positions of the Democratic Caucus, advised the Democratic Steering and Outreach Committee Hispanic Task Force and managed external relations with a broad number of advocacy groups and coalitions.

Prior to her time on Capitol Hill she served as Director of the Civil Rights and Criminal Justice Policy at the National Council of La Raza (NCLR) the largest national Hispanic civil rights and advocacy organization in the U.S. She served as the organizations spokesperson on civil rights and policy issues. She was responsible for civil rights and criminal justice policy analysis, advocacy activities, and research that have an impact on Latinos in the United States. Arboledas publications include Lost Opportunities: the Reality of Latinos in the U.S. Criminal Justice System, the first book to ever focus on Latinos in the justice system.

Earlier in her career, Arboleda worked at the National Organization for Women (NOW) and the Feminist Majority Foundation where she was lead organizer for political and corporate campaigns, ballot initiatives and political rallies.

Arboleda is a graduate of the Elliot School of International Affairs at George Washington University.

About Herbalife Ltd.

Herbalife Ltd. is a global nutrition company that sells weight-management, nutrition and personal care products intended to support a healthy lifestyle. Herbalife products are sold in more than 80 countries to and through a network of independent distributors. The company supports the Herbalife Family Foundation and its Casa Herbalife program to help bring good nutrition to children. Herbalife's website contains information about Herbalife, including financial and other information at Herbalife - United States - Official Site (http://www.herbalife.com).

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20140324006369r1&sid=acqr7&distro=nx

Herbalife Ltd.
Media Contact:
Julian Cacchioli
213-745-0519
or
Investor Contact
Amy Greene
213-745-0474

Source: Herbalife Ltd.
Copyright Business Wire 2014"

Whip

03-29-2014, 08:23 PM

looking for a lil influence with the investigation?

JustTooMuchTime

04-03-2014, 01:52 PM

"The FTC is now investigating Herbalife and, put simply, these are the kinds of questions investigators will be asking.

Do participants make money?
How many quit?
Is the company like an iceberg?
Are sales made to non-participants?
Does the pay plan encourage inventory loading?
Is compensation tied to retail sales to ultimate users?
Does the pay plan emphasize recruiting over retail sales?
Are the results experienced by participants rigged/preordained?
Is there evidence the company is a money transfer scheme?

When you contrast the earnings of company shareholders like Carl Icahn and Bill Stiritz or the company's management team with the earnings and churn rates of the company's most junior participants, what do you see? Isn't it obvious that shareholder spoils are financed by the economic losses of those who are recruited with false promises and false hope?"

Full story:
Herbalife Ltd. (HLF) news: 4 Million Reasons Herbalife Is A Money Transfer Scheme - Seeking Alpha (http://seekingalpha.com/article/2124533-4-million-reasons-herbalife-is-a-money-transfer-scheme)

JustTooMuchTime

04-11-2014, 10:53 PM

"The FBI has launched a criminal investigation of Herbalife and its web of independent distributors, a federal law enforcement source told The Times.

A federal law enforcement official in New York confirmed Friday that the FBI had opened an inquiry into Herbalife but did not know first-hand the extent of the investigation. “I can’t give any guidance on where it’s headed,” the official said.

The official asked not to be identified because he was not authorized to speak about publicly about the investigation, which was first reported by the Financial Times."

Herbalife under FBI investigation; shares tumble - latimes.com (http://www.latimes.com/business/money/la-fi-mo-herbalife-criminal-probe-shares-tumble-20140411,0,687262.story#ixzz2ydn2Qo5t)
"

JustTooMuchTime

04-14-2014, 05:16 PM

"New York Attorney General Eric Schneiderman is investigating Herbalife over claims it is a pyramid scheme, The Post has learned.

At least two whistleblowers have come forward and given Schneiderman’s investigators sworn testimony, sources said.

The New York lawman has also fielded complaints from former Hispanic Herbalife distributors who say they were defrauded by Herbalife, sources said.

A spokesman for Schneiderman declined comment."

NY attorney general probes Herbalife: sources | New York Post (http://nypost.com/2014/04/14/ny-attorney-general-probes-herbalife-sources/)

JustTooMuchTime

04-14-2014, 05:19 PM

"NEW YORK, April 14, 2014 (GLOBE NEWSWIRE) -- Pomerantz LLP announces the filing of a class action lawsuit against Herbalife Ltd. ("Herbalife" or the "Company") (NYSE:HLF) and certain of its officers. The class action, filed in United States District Court, Central District of California and docketed under 2:14-cv-02850, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of Herbalife between May 4, 2010 and April 11, 2014 both dates inclusive (the "Class Period"). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

If you are a shareholder who purchased Herbalife securities during the Class Period, you have until June 13, 2014, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at Pomerantz Law (http://www.pomerantzlaw.com). To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

Herbalife is a network marketing company that sells weight management, nutritional supplement and personal care products. The Company sells its products globally through a network of independent distributors, which are typically individuals with little marketing expertise that were induced by the Company to purchase the Company's products in the hope that they would be able to resell the product to other consumers or distributors. Herbalife also sells literature and promotional materials to these distributors.

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company's operations were based on a pyramid scheme whereby its distributors generate revenue by recruiting other distributors rather than selling Herbalife's diet and nutritional products to the general public; (ii) the Company engaged in deceptive trade practices where it unduly pressured its members to purchase more products to resell as one of its "distributors"; and (iii) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.

On December 19, 2012, CNBC reported that Bill Ackman ("Ackman"), Founder and Chief Executive Officer of Pershing Square Capital Management, L.P. ("Pershing") considers Herbalife to be a pyramid scheme after spending a year researching the Company's fundamentals. On this news, Herbalife stock declined $5.16 per share, or over 12%, to close at $37.34 per share on December 19, 2012.

On December 20, 2012, Ackman conducted a presentation concerning Herbalife at the Sohn Investment Conference where he affirmed his conclusion that Herbalife is a pyramid scheme as its distributors make more money by recruiting other distributors than selling the Company's products to the general public. Specifically, Ackman alleged that since the founding of the Company, approximately 1.9 million distributors have failed to make any money from selling Herbalife products, costing them a net loss of $3.8 billion. On this news, Herbalife stock declined an additional $10.07 per share, or over 27%, over the next two trading sessions, to close at $27.27 per share on December 21, 2012.

On January 9, 2013, the New York Times reported that the Securities and Exchange Commission had opened an investigation into the Company.

On January 23, 2014, U.S. Senator Edward J. Markey of Massachusetts sent letters to federal regulators, including the SEC and the FTC, urging them to investigate Herbalife. Mr. Markey also sent a letter to Herbalife's CEO, Michael O. Johnson, asking several questions about the company's business, including pointed requests that reflected the concerns raised by Ackman in December 2012. Some of the questions asked in the letter to Herbalife include: (1) "How much profit (net earnings after expenses) can the average distributor expect to make from retailing to non-distributors (i.e., people who are not directly involved in Herbalife themselves)?"; and (2) "What's the correct number of sales outside the network as a percentage of total sales" for each of the last five years and information on these sales measured by product, quantity and dollars.

Senator Markey urged both the FTC and SEC to examine whether Herbalife was a legitimate multilevel marketing Company, whose revenues are ultimately generated by sales to the general public; or whether Herbalife was a pyramid scheme, whose revenues were dependent on continuous recruitment of other distributors, which were ultimately left sustaining substantial losses on their purchases of the Company's weight loss products. To highlight evidence that Herbalife may indeed operate as a pyramid scheme, Senator Markey pointed to instances where residents of Massachusetts suffered crushing financial setbacks as a result of the Company's marketing practices. On this news, Herbalife stock declined $7.61 per share, or over 10%, to close at $65.92 per share on January 23, 2014.

On April 11, 2014, the Financial Times reported that the United States Department of Justice and Federal Bureau of Investigation had opened a criminal probe of Herbalife. On this news, shares of Herbalife spiraled downward from $59.84 to $51.48, more than 13%.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.

CONTACT: Robert S. WilloughbyPomerantz LLPrswilloughby@pomlaw.com

Source: Pomerantz LLP"

Read more: Pomerantz Law Firm Announces the Filing of a Class Action Against Herbalife Ltd. and Certain Officers -- HLF - NASDAQ.com (http://www.nasdaq.com/press-release/pomerantz-law-firm-announces-the-filing-of-a-class-action-against-herbalife-ltd-and-certain-20140414-00960#ixzz2ytyMfAM4)

JustTooMuchTime

04-15-2014, 02:59 PM

"Quoth the Raven
Long/short equity, contrarian, special situations, wild cards
Profile| Send Message| Follow (3,501)
Regulators Pile On Herbalife And Capital Managers Should Re-Evaluate Their Positions In The Company
Apr. 15, 2014 12:40 PM ET | 32 comments | About: HLF

Disclosure: I am short HLF."

"1. We can clearly see that "traditional analysts" don't have much of a clue about what, intrinsically, makes up Herbalife's business model.

This isn't a traditional P/E and net income situation. This Herbalife case is a specialty situation and if you do traditional analysis on this company without a comprehensive understanding of how the model works, you're likely to get burned because you're not looking at the forest for the trees.

I could go back and cite numerous blunders here - Tim Ramey's horrible start to 2014 with Herbalife, Stiritz's position that's now underwater, Icahn seemingly not knowing how the business model works (http://seekingalpha.com/article/2137143-top-5-absurd-carl-icahn-quotes-about-herbalife) (or anything at all about Herbalife, for that matter).

But, the best example that the traditional analysts are getting Herbalife wrong is Barclays' analysis of the stock, which was put out just days ago on April 8th. I immediately refuted this report the next day in my article, "Barclays Beefs Its Herbalife Analysis. (http://seekingalpha.com/article/2132763-barclays-beefs-its-herbalife-analysis)"

Full story:
Herbalife Ltd. (HLF) news: Regulators Pile On Herbalife And Capital Managers Should Re-Evaluate Their Positions In The Company - Seeking Alpha (http://seekingalpha.com/article/2142573-regulators-pile-on-herbalife-and-capital-managers-should-re-evaluate-their-positions-in-the-company)

ribshaw

04-17-2014, 10:27 AM

Herbalife a big part of this story, so I hope ok if I drop it here as opposed to a new thread.

How lobbying dollars prop up pyramid schemes

As federal regulators investigate Herbalife, a long history of political maneuvering becomes relevant again

By Matt Stroud on April 8, 2014

Last month, a front page New York Times investigative report revealed that Bill Ackman, the hedge fund manager crusading against nutritional supplement company Herbalife, had pressured legislators and paid civil rights organizations upwards of $130,000 to start a federal investigation into the company’s business practices.

The New York Times acknowledged that "Herbalife has mobilized its own army of lobbyists to defend itself against Mr. Ackman’s charges." But it didn’t emphasize that Herbalife spent nearly 800 percent more on lobbying in 2013 than Ackman did. It also didn’t mention that Herbalife’s intense lobbying effort last year is part of an influential, decades-old political strategy undertaken by the multi-level marketing (MLM) industry — a group of companies and industry groups like Herbalife that promote so-called "direct sales" businesses, which sell products in tandem with the opportunity to sell products. This political strategy — with ties to dozens of current congressional representatives who have received handsome donations from MLM companies and industry lobbyists — has pushed federal regulators away from investigating these companies. It’s also encouraged federal regulators to avoid defining the explicit difference between a legal MLM and an illegal pyramid scheme.

Only three days after the New York Times’ report, Herbalife announced it was being investigated by the Federal Trade Commission (FTC). But with Herbalife officials now in their third week of closed-door meetings with the FTC — and with the majority opinion in a US Supreme Court ruling expressing last week that unlimited campaign contributions by corporations represent "the most fundamental First Amendment activities" — it’s worth asking how MLMs have influenced federal regulators in the past through political maneuvering, and how that influence might continue.
Business opportunity

Herbalife and the FTC have chatted before. In fact, the clearest and most recent example of Herbalife’s influence — and the broader influence of Herbalife-connected MLM lobbying dollars — is a law that became effective in the spring of 2012. After years of political maneuvering, the principal organization that represents MLMs — the Direct Selling Association (DSA) — succeeded in exempting most MLM distributors from this new law, which was designed with "work-from-home" business-opportunity sellers in mind.

It was called the Business Opportunity Rule. Put forward by the FTC in April 2006 to "protect consumers from bogus business opportunities," the proposed rule would require sellers to hand potential customers a one-page document revealing some seemingly simple facts about what they were up to. Namely: whether the company was involved in any fraud-based lawsuits; the terms of its refund policies; "The total number of purchasers in the past two years and the number of those purchasers seeking a refund or to cancel in that time period;" and a list of references. It would also require some documentation supporting any income claims the seller was making.

"The FTC roped in multi-level marketers with scammers."

That last piece was important. It meant that a no-name seller pushing a no-name company couldn’t just say they had discovered some easy method to make millions or "end baldness in the human race" without proving it. But the proposed rule would affect MLMs, too — many of which were well-known companies traded on Wall Street. Distributors working for Herbalife and Amway, for example, would’ve been forced to hand over the same one-page disclosure as the scammy companies promising work-from-home data-entry jobs.

To some, this was perfectly reasonable. Many MLM companies have been accused of over-promising earning potential, and have been the target of class-action lawsuits filed by people who say they’ve been lied to about how much money they can earn. One key case in MLM history revolved, in part, around just this kind of alleged misrepresentation. The case was filed by the FTC against Amway, one of the oldest and largest MLMs in the country, which offers an opportunity for anyone to buy and sell health, beauty, and home care products from home. The FTC’s eventual 121-page final document in that case questions an Amway instruction sheet for encouraging its distributors to insinuate that selling the company’s products could "make your dreams come true."

But to MLMs, the proposed rule was a travesty. Herbalife in particular, which had spent almost nothing on lobbying or campaign contributions in 2002, embarked on a spending spree to coincide with the FTC’s proposed rule. The company gave handsomely to MLM-friendly Republicans, such as Wisconsin Congressman Paul Ryan and Pennsylvania Senator Rick Santorum. Democrats got a taste, too, with New York Congressmen Edolphus Towns, Eliot L. Engel, and Gary Ackerman receiving contributions. By 2008, Herbalife had spent more than $800,000 on lobbying.

Herbalife_lobbying_chart
Herbalife's lobbying dollars hit a peak in 2008, as the company pushed against the FTC's proposed Business Opportunity Rule. Last year, its lobbying spending hit another high as the company campaigned against Bill Ackman, who placed a billion-dollar Wall Street bet that the company is a pyramid scheme. (OpenSecrets)

The company wasn’t alone. The immense political contributions of Amway’s founders and their families have been well-documented, particularly where Republican politics are concerned (a report in Mother Jones magazine earlier this year referred to them as "The New Kochs"). But Amway specifically flexed its corporate muscle to stop the rule, tripling its lobbying dollars between 2006 and 2007. Avon, another MLM questioned for its business practices and political action, spent about triple the amount it spent on individual congressional campaign contributions in 2008 as it did in the next highest-spending year in its history.

Meanwhile, the industry trade group DSA pushed more than 17,000 people to send form letters to the FTC between 2006 and 2008, raging against the opportunity-killing oppression of a rule that roped MLM distributors in with other suspect work-from-home salespeople.

""Some MLMs do engage in unfair or deceptive acts.""

In all, responding to DSA’s push and political contributions from MLM companies, 81 congressmen* — 57 republicans and 24 democrats — wrote multiple letters urging the FTC to change its stance on MLMs in the Business Opportunity Rule. MLM detractors sent 187 comments in favor of the proposal as it was written, but that number was dwarfed by DSA’s political army.

In the end, the FTC decided to modify its rule in favor of MLMs. In a staff report to the FTC, analysts wrote that the rule "would have imposed greater burdens on the MLM industry than other types of business-opportunity sellers without sufficient countervailing benefits to consumers." A footnote to that quote, however, acknowledges "that some MLMs do engage in unfair or deceptive acts or practices, including the operation of pyramid schemes or unsubstantiated earnings claims that cause consumer harm." The proposal finally became law in 2012 — and MLMs got a pass.
Money for nothing

Or did they? In a conversation with The Verge last week, Amy M. Robinson, a senior vice president and chief marketing officer with the DSA, acknowledged that the FTC’s final action was a good thing for MLMs. But it is still worrisome, she says. According to Robinson, some wiggle room for FTC intervention remains in the law as it was passed in 2012. "It is DSA’s view that under the definition in the Rule, most [MLMs] would not be subject to the rule," she says. "It’s not a blanket exemption."

But it’s close enough, says Bruce Craig, a former assistant attorney general in Wisconsin who has litigated several high-profile US pyramid scheme cases. Craig says that MLM lobbying dollars are dangerous — and unfair — because they effectively silence the people who are taken advantage of by companies like Amway and Herbalife. "These are people, by and large, who are mesmerized by how these very rich people get on the stage and claim they’re making millions by selling health shakes," he says. "The people who get taken advantage of are unsophisticated, from a business perspective. They’re not very wealthy. They quit their day job, they max out their credit cards, they contact all their friends and neighbors. This is the basic phenomenon."

""They quit their day job, they max out their credit cards, they contact all their friends and neighbors.""

Robert FitzPatrick points out the irony of MLMs being exempted from the Business Opportunity Rule. "How is it possible," asks FitzPatrick, an MLM critic and author of False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes, "that the FTC has not even imposed disclosure rules on a network of enterprises that pulls as much as $30 billion a year out of 15 million American households every year with a ‘business opportunity’ proposition?"

The answer comes down to politics, he says. "MLM lives and has always lived on the strength of its lobbying." That should worry anyone like FitzPatrick, who’s hoping the FTC will take major action against Herbalife and MLMs after it concludes its ongoing investigation into Herbalife. Part of the problem is that, until recently, "no money at all was ever spent on lobbying against MLM by anyone," FitzPatrick writes in an email to The Verge. "All the ‘anti-MLM’ advocates came to battle without guns."

That is, until Bill Ackman made his billion-dollar bet that Herbalife was a pyramid scheme in December 2012.

"Ackman changed the equation somewhat and also brought the issue to the attention of Wall Street, where it had been ignored or perhaps merely viewed from an ethics-free perspective," FitzPatrick writes. "However, measured against the lobbying of the MLM industry, [Ackman] is like Edward Snowden versus the NSA / CIA."

""Measured against the lobbying of the MLM industry, [Bill Ackman] is like Edward Snowden versus the NSA / CIA.""

According to FitzPatrick, last month’s New York Times piece digging into Ackman’s political maneuvering "pretended that Ackman is somehow wielding undue influence."

That’s an odd way to see things, argues Bill Keep, an MLM expert who's dean of the business school at the College of New Jersey.

"Suppose the worst of what people say about both Ackman and Herbalife are true — Ackman is targeting Herbalife simply for the financial return for his hedge fund, and Herbalife is operating a massive, international pyramid scheme," Keep says. "Which should worry us more?"

Keep continues: "The FTC's decision to open an investigation of Herbalife was non-trivial. Everything is now on the table, from invoking the Business Opportunity Rule, to clarifying any misinterpretation of [federal MLM rules], to charging Herbalife with operating a pyramid scheme."

"Any one of these outcomes will send ripples through the industry," he says. "Though instead of a ripple, the latter would be more like a tsunami."

* The names of these 81 congressmen were provided to The Verge by Douglas Brooks, an outspoken MLM critic and Massachusetts -based lawyer who often represents victims of fraudulent and deceptive MLMs.

How lobbying dollars prop up pyramid schemes | The Verge (http://www.theverge.com/2014/4/8/5590550/alleged-pyramid-schemes-lobbying-ftc)

JustTooMuchTime

04-17-2014, 02:23 PM

"Illinois Attorney General Lisa Madigan's office is investigating nutrition and weight loss company Herbalife, her press secretary said on Thursday."

"Madigan's office joins the Federal Trade Commission and New York Attorney General Eric Schneiderman's office in probing the company. The Federal Bureau of Investigation has reached out to former Herbalife distributors and is probing their business documents."

More:
Illinois Attorney General investigating Herbalife (http://www.cnbc.com/id/101593027)

JustTooMuchTime

04-17-2014, 02:25 PM

"An obscure Australian hedge fund manager who last year became a media darling with his acerbic attacks on Bill Ackman’s $1 billion Herbalife short is now sobbing to his investors about losing money.

'Things that should work are not working,” John Hempton of Bronte Capital moaned to investors in February.'"

More:
Ackman adversary John Hempton falls off Herba-cliff | New York Post (http://nypost.com/2014/04/16/ackman-adversary-john-hempton-falls-off-herba-cliff/)

NikSam

04-17-2014, 06:33 PM

ribshaw

04-17-2014, 07:50 PM

Stock analysts very rare are right on their models. And I am 100% sure they have no idea how to analyze a regular pyramid, that's where they were wrong :)

they were analyzing what they insisted is a " health food producer / supplier" but even then it was with fabricated earning reports.

Very true! I would expect the market itself (presumably from those with true inside knowledge) to sell this stock off hard if they really started to think the government was going to take this thing apart. The best example of that comes to mind of this is Enron from back in the day. The analysts loved it at 80$, with a few short sellers sounding the alarm. BUT from an accounting standpoint, whole other kettle of fish than HLF.

JustTooMuchTime

04-18-2014, 01:14 PM

"SAN FRANCISCO, Apr 18, 2014 (BUSINESS WIRE) -- The law firm of Lieff Cabraser Heimann & Bernstein, LLP announces that class action litigation has been brought on behalf of those who purchased or otherwise acquired the securities of Herbalife Ltd. (“Herbalife” or the “Company”) HLF -0.09% between May 4, 2010 and April 11, 2014, inclusive (the “Class Period”)."

Full release:
Lieff Cabraser Announces Class Action Litigation Against Herbalife Ltd. - HLF - MarketWatch (http://www.marketwatch.com/story/lieff-cabraser-announces-class-action-litigation-against-herbalife-ltd-hlf-2014-04-18)

JustTooMuchTime

04-22-2014, 01:13 PM

"LOS ANGELES--(BUSINESS WIRE)--Herbalife (NYSE: HLF), a leading global nutrition company, is proud to announce its recognition as one of the leading companies recognized in LATINO Magazine’s “LATINO 100” Spring 2014 issue, an annual listing that spotlights companies providing the most viable business opportunities for U.S. Latinos.

“We are incredibly honored by LATINO Magazine’s acknowledgment of Herbalife as one of the top corporate supporters of the growing U.S. Latino population,” said Ibi Fleming, senior vice president and managing director, Herbalife North America. “Latinos across the country have historically embraced Herbalife’s nutrition products since the company’s founding in 1980. Their success is a tribute to the hard work of our members and a clear demand among Latinos for a healthy lifestyle. We are also proud to be acknowledged for our work in fostering and ensuring workplace diversity in our corporate culture.”"

Full Herbalife Press release:
Herbalife Recognized as a Corporate Role Model in Latino Magazine’s Second Annual “Latino 100” Spring 2014 Issue | Business Wire (http://www.businesswire.com/news/home/20140422006366/en/Herbalife-Recognized-Corporate-Role-Model-Latino-Magazine%E2%80%99s#.U1awpVcwD4c)

JustTooMuchTime

04-22-2014, 01:18 PM

"BENSALEM, Pa., Apr 22, 2014 (BUSINESS WIRE) -- Law Offices of Howard G. Smith announces that it is investigating potential claims on behalf of investors of Herbalife Ltd. (“Herbalife” or the “Company”) HLF +2.74% . The investigation concerns possible violations of federal securities laws, and focuses on the Company’s business, operations and financial performance."

Full Press Release:

SHAREHOLDER ALERT: Investigation on Behalf of Herbalife Ltd. Investors Announced by Law Offices of Howard G. Smith - MarketWatch (http://www.marketwatch.com/story/shareholder-alert-investigation-on-behalf-of-herbalife-ltd-investors-announced-by-law-offices-of-howard-g-smith-2014-04-22)

Soapboxmom

04-22-2014, 01:28 PM

The investigation is related to allegations that the Company’s distributors generate revenue by recruiting other distributors rather than selling Herbalife’s diet and nutritional products to the general public, and that the Company engaged in deceptive trade practices and unduly pressured its Members to purchase more products for resale.

Time for that lawyer to quit pointing out the obvious and file!

NikSam

04-22-2014, 04:18 PM

I wonder if at the end we will see all responsible punished, probably not.
How about auditors who signed their name on earning reports,
lawyers, legal council who misled and witheld critical information ?

so at the end HLF will just leave US market and continue in other countries till those crack down on them one by one ?

JustTooMuchTime

04-22-2014, 09:31 PM

"In his year-long campaign against the embattled Herbalife company, Wall Street hedge fund manager Bill Ackman secretly promised a disgruntled former company executive as much as $3.6 million over 10 years if he lost his job after providing information to government investigators and the media.

Ackman’s firm so far has paid the whistleblower $80,000 under the arrangement, according to the former Herbalife executive’s lawyer.

“It was the right thing to do,” Ackman told ABC News.""

The article talks about an abc interview with the former executive where the deal wasn't disclosed properly.

" Ackman said he agreed to the deal after Bohorquez balked at going public because he feared his disclosures could make it difficult for him to find work at an executive level.

“Giovanni could not afford to take the company on. We thought his story was important,” Ackman told ABC News. “Being a whistleblower is a very dangerous thing to do if you want to get a job."

Bohorquez is one of the few insiders to ever talk critically about Herbalife."

"Taken together, the total value to Bohorquez over 10 years could be as much $3.61 million.

The deal requires Bohorquez to actively look for work and to be truthful in all of his statements about Herbalife to the media and government.

“You should judge for yourself whether Giovanni is an honest man or not,” Ackman said. “I think Giovanni will be viewed as a hero.”"

Full article:
Page 1: Bill Ackman (http://abcnews.go.com/Blotter/bill-ackmans-secret-deal-herbalife-whistleblower/story?id=23415501&page=1)

JustTooMuchTime

04-22-2014, 09:56 PM

"Short interest grows 13% in a matter of weeks as the investigative pile on continues

In March, shares of Herbalife Ltd. (NYSE:HLF) were subject to short interest growth of 13.4%, totaling 25,013,446 shares betting the stock will head lower. This stands in contrast to short interest of 22,058,820 according to Analyst Ratings.net reports."

Full story:
Short Interest In Herbalife Ltd. Grows As Trouble Mounts (http://www.valuewalk.com/2014/04/short-interest-in-herbalife-ltd-grows/)

JustTooMuchTime

04-23-2014, 02:42 PM

Activist investor Bill Ackman told CNBC on Wednesday that his losses from betting against Herbalife (HLF) have been "more than cut in half" based on the recent downturn of the nutritional supplement company's stock.
Related Stories

"This is unfortunately a very bad company, causing a lot of harm," Ackman said in a " Squawk Box " interview.

More:
http://finance.yahoo.com/news/herbalife-short-looking-much-better-160957866.html

JustTooMuchTime

04-23-2014, 10:43 PM

"WASHINGTON (Reuters) - Herbalife, a weight loss and nutrition company being investigated for allegations of running a pyramid scheme, disciplined hundreds of distributors last year for making unsubstantiated medical claims about its products, ABC News reported on Wednesday."

"In one case, an ABC reporter posing as a customer caught a Staten Island, New York, distributor on a hidden camera saying a woman overcame a brain tumor after using Herbalife products, the network said.

Asked by ABC in a televised report if Herbalife cured brain tumors, Herbalife President Des Walsh said: "Absolutely not. Frankly, I am appalled to hear you say this because what is happening there is a complete and absolute violation of our rules."

Asked if such incidents happened often, Walsh replied: "I do not believe so."

Full story:
Herbalife punished 600 distributors for medical claims: ABC News - News - WSAU News/Talk 550AM 99.9FM (http://wsau.com/news/articles/2014/apr/24/herbalife-punished-600-distributors-for-medical-claims-abc-news/)

JustTooMuchTime

04-24-2014, 02:20 PM

Opinion piece by By Jonathan Macey — Professor, Yale Law School, Yale School of Management

"Short selling is vital to the economy because it is instrumental in ferreting out corporate fraud. Short sellers have just as much right to advocate publicly for their positions as companies like Herbalife."

"The Madoff scandal provides an object lesson in what happens when concerned citizens try to get regulators interested in investigating Ponzi schemes without resorting to lobbying. Financial investigator and gadfly Harry Markapolos investigated Bernie Madoff’s massive Ponzi scheme for nine years and came to the conclusion that the business was a massive Ponzi scheme. Markapolos repeatedly made his case to the SEC and the media but to no avail The title of Markapolis’s book, “No One Would Listen: A True Financial Thriller,” says it all. Markapolis’s efforts to expose Madoff failed for two reasons.

First, unlike big hedge funds and other investors, Markapolis did not have the resources or the incentives to lobby politicians to push regulators in to action. Second, unlike Pershing Square, which is a large, successful hedge fund, Mr. Markapolis was (wrongly) viewed as something of a crank because he had no skin in the game. In sharp contrast, Pershing capital reportedly is betting over a billion dollars in its investors’ capital that Herbalife is a pyramid scheme. That investment gives them a lot of credibility in my book."

Full opinion piece:
It's Perfectly Fine For Herbalife Short-Sellers To Lobby The Government - Forbes (http://www.forbes.com/sites/realspin/2014/04/24/its-perfectly-fine-for-herbalife-short-sellers-to-lobby-the-government/)

JustTooMuchTime

04-24-2014, 02:24 PM

"Although the amount is not listed, Herbalife Ltd. (NYSE:HLF) included LATINO Magazine on the donation list activist investor Bill Ackman gave to The New York Times (page 112). There are also several Hispanic and Latino organizations on that list, including: the U.S. Hispanic Chamber of Commerce, Voto Latino, Latina Style, the Hispanic Heritage Foundation, the Hispanic Institute and a few others."

"Bill Ackman has also made his share of contributions which some would consider to be questionable. He did make a deal with the man who blew the whistle on Herbalife Ltd. (NYSE:HLF)’s operations in 2011. What more people were concerned about was his campaign contributions to New York Attorney General Eric Schneiderman. Those contributions were said to have come before the Schneiderman’s office began its investigation."

"at the end of the day, there’s no proof of motivations"

Full story:
Herbalife Donated To LATINO Magazine Before Being Honored (http://www.valuewalk.com/2014/04/herbalife-donated-to-latino-magazine/)

JustTooMuchTime

04-24-2014, 09:51 PM

Highlights of April 24, 2014 article
By BRIAN ROSS, MATTHEW MOSK, RYM MOMTAZ and WILLIAM GALLEGO

"We provide clear, accurate and timely disclosures to prospective members regarding potential income," a statement by the company said. "Studies have revealed that the vast majority of Herbalife members have realistic expectations of the business opportunity and the effort required to succeed at all levels."

At the same time, the hedge fund Pershing Square, released its own response to the reports on ABC News' "World News With Diane Sawyer" and "Nightline". Pershing Square has for a year been urging regulators to investigate Herbalife.

"ABC’s investigative report revealed examples of the pervasive and fraudulent wealth and health claims that drive Herbalife’s pyramid scheme," the statement said.

The sessions included statements, live or on tape, from company executives saying that personal experiences as distributors could vary and that no particular testimonials should be viewed as average or expected.

There was also no shortage of substantial income claims.

Article gives several examples.

Walsh told ABC News the company responds immediately to reports of rogue distributors who overstate the potential of an Herbalife career.

I wonder if that applies to the high ranking distributor mentioned in the article who purportedly said:

"Before you know it, not only will you be a supervisor, but you’ll have supervisors under you, who’ll have five supervisors under them, who’ll have five supervisors under them,” the instructor explained at the Herbalife seminar in Flushing, Queens. "That’s 155 supervisors and if they’re each doing about 2,000 to 2,500 volume points a month, you’re going to be making somewhere in the neighborhood of $42,000 a month."

Full article:
http://abcnews.go.com/Blotter/herbalife-ackman-respond-nightline-undercover-report/story?id=23457777&page=

JustTooMuchTime

04-28-2014, 05:49 PM

"In his quest to bring down Herbalife, activist investor Bill Ackman will publicly showcase a documentary about former Herbalife distributors who say they were defrauded by the company."

"The documentary will be shown at an event Friday in New York City. Members of the press, government, community and consumer organizations are invited to attend the showing, which will be simultaneously webcast."

"The film will be followed by a live panel discussion with individuals in the film, moderated by former CBS news anchor Connie Chung.

Chung said she took the gig on the condition she would not be paid and would be given free rein to treat it like any other news story. She plans to interview Herbalife executives and the victims ahead of time.

“It is such an incredible, meaty story,” Chung told The Post.

Full story:
Ackman documentary stars alleged Herbalife victims | New York Post (http://nypost.com/2014/04/27/ackman-documentary-stars-alleged-herbalife-victims/)

JustTooMuchTime

05-01-2014, 10:11 PM

Robert FitzPatrick replacing Connie Chung for Herbalife Distributor Panel discussion....

" May 01, 2014 04:08 PM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Pershing Square Capital Management, L.P. announced today that multi-level marketing expert Robert FitzPatrick will replace Connie Chung as the moderator of the Friday, May 2, 2014 panel discussion with former Herbalife distributors.

“The focus of this event has always been the victims. While we’re disappointed Connie Chung isn’t able to moderate the panel, we’re pleased Robert FitzPatrick, an expert in multi-level marketing schemes, will lead the discussion.”

The panel discussion will follow the screening of a brief documentary featuring more than a dozen former Herbalife distributors recounting their experience with the company and how they were harmed by the Herbalife pyramid scheme.

Chung, who required as a condition to appear as an unpaid, independent journalist, said: "I intended to fully vet every aspect of this complicated story but concluded I needed a team of researchers, which I did not have at my disposal. There were too many levels and sides to the story."

A Pershing Square spokesman said: “The focus of this event has always been the victims. While we’re disappointed Connie Chung isn’t able to moderate the panel, we’re pleased Robert FitzPatrick, an expert in multi-level marketing schemes, will lead the discussion.”

For a preview of the video and more information about Herbalife, go to www.HerbalifePyramidScheme.com or www.FactsAboutHerbalife.com.

Journalists, community and advocacy groups and elected leaders are invited to attend the event, which will take place in New York City. For more information about attending, please contact Farrell Sklerov at Rubenstein Associates.

About Robert FitzPatrick

Robert L. FitzPatrick is an expert in examining and revealing deception and fraud in Ponzi schemes, pyramid schemes and bogus home-based businesses. He is an author, teacher and internationally recognized authority in multi-level marketing schemes and pyramid sales fraud. A catalyst and leader in the international effort to end fraud in the direct selling industry, Robert founded and serves as president of Pyramid Scheme Alert, the first international association to expose and prevent pyramid scheme fraud.

He is co-author of False Profits, the first book to critically examine the recent rise in pyramid and Ponzi schemes in home-based businesses. He was featured on NBC Dateline, ABC World News, and he was interviewed by correspondent Mike Wallace on CBS 60 Minutes. He has been interviewed live on NBC Today show, Canada's CBC National News, Christian Broadcasting Network, and on several BBC radio news programs aired in the UK. He has been quoted in many newspapers around the world, including the New York Times and Wall Street Journal.

About Pershing Square Capital Management, L.P.

Pershing Square Capital Management, L.P. ("Pershing Square"), based in New York City, is a SEC-registered investment advisor to private investment funds. Pershing Square manages funds that are in the business of trading — buying and selling — securities and other financial instruments. Funds managed by Pershing Square are short the stock of Herbalife Ltd. Pershing Square may increase, decrease, dispose of, or change the form of its investment in Herbalife for any or no reason, at any time. Pershing Square may change its views about or its investment positions in Herbalife at any time, for any reason or no reason. Pershing Square may buy, sell, cover or otherwise change the form or substance of its Herbalife investment. Pershing Square disclaims any obligation to notify the market of any such changes. Please see the full Disclaimer appearing on websitewww.factsaboutherbalife.com.

Contacts

Rubenstein Associates
Farrell Sklerov, 212-843-8289
fsklerov@rubenstein.com"

JustTooMuchTime

05-01-2014, 10:15 PM

Not sure how Herbalife is concluding that Connie Chung is withdrawing from a "spectacle" since she never said that as far as I can tell.

"Herbalife Comments on Pershing Square-Sponsored Advertisement

May 01, 2014 07:21 PM Eastern Daylight Time

LOS ANGELES--(BUSINESS WIRE)--Herbalife (NYSE:HLF) a leading global nutrition company, today commented on the upcoming event hosted and sponsored by Bill Ackman and Pershing Square Capital Management. As recently confirmed by ABC News, Mr. Ackman has spent more than $20 million to date on his campaign against Herbalife. Herbalife views the release of this advertisement posing as a “documentary” as nothing more than propaganda. The company believes this is yet another tactic in Mr. Ackman’s calculated, coordinated and well-funded effort to destroy a 34-year old company and support his $1 billion bet against Herbalife.

We applaud Connie Chung’s decision to withdraw from this spectacle. We believe the decision of an independent journalist to withdraw shows Mr. Ackman’s event for what it is: misleading propaganda designed to help achieve his ultimate goal of enriching himself by driving down Herbalife’s stock.

As for the event's new moderator, Robert Fitzpatrick, a self-proclaimed expert in multi-level marketing, he is a known critic of the industry, and a consultant to Mr. Ackman and three-time convicted felon and perpetrator of fraud Barry Minkow. Herbalife believes Mr. Fitzpatrick’s involvement is further evidence that this “documentary” is merely another biased attack on our company. As such, Herbalife has not been asked to nor has any intention of participating in Friday’s media event.

Since 2008, approximately 1.6 million new members have joined Herbalife in the U.S., including nearly 84,000 in the first quarter of this year alone. Studies have clearly shown that the vast majority of Herbalife members have realistic expectations and a positive experience.

The ‘Gold Standard’ consumer protection rules that Herbalife offers all its members not only meet, but in most cases exceed the standards prescribed by the Direct Selling Association (DSA), of which the company is a long-time member in good standing. The Gold Standard guarantees:

no minimum purchase requirements and no requirement to purchase any sales or business tools to start up or succeed;
low start-up costs and 100% 90-day money back guarantee for cost of start-up pack;
100% money-back guarantee, plus shipping costs, for all unsold products purchased within prior 12 months; and
clear, accurate and timely disclosures regarding potential income-generating opportunities in the Statement of Average Gross Compensation, which can be found here.

In addition, Herbalife requires that its members acknowledge in writing that they are aware of each of these Gold Standard Guarantees before their application is accepted.

The company has recently unveiled iamherbalife.com to highlight, in their own words, the positive impact Herbalife has had on the lives of the company’s members and customers. It also shines a light on the truth behind the allegations made by Mr. Ackman and the extraordinary lengths he has gone to in order to achieve his goal of driving down Herbalife’s stock price for financial gain.

About Herbalife Ltd.

Herbalife Ltd. (NYSE:HLF) is a global nutrition company that sells weight-management, nutrition and personal care products intended to support a healthy lifestyle. Herbalife products are sold in more than 90 countries to and through a network of independent members. The company supports the Herbalife Family Foundation and its Casa Herbalife program to help bring good nutrition to children. Herbalife's website contains a significant amount of financial and other information about the company at Herbalife Ltd. - Investor Relations (http://ir.Herbalife.com). The company encourages investors to visit its website from time to time, as information is updated and new information is posted.

FORWARD-LOOKING STATEMENTS

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following:

our relationship with, and our ability to influence the actions of, our Members;
improper action by our employees or Members in violation of applicable law;
adverse publicity associated with our products or network marketing organization, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;
the outcome of inquiries from regulatory authorities;
changing consumer preferences and demands;
our reliance upon, or the loss or departure of any member of, our senior management team which could negatively impact our Member relations and operating results;
the competitive nature of our business;
regulatory matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of our products and network marketing program, including the direct selling market in which we operate;
legal challenges to our network marketing program;
risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, disruptions or conflicts with our third party importers, pricing and currency devaluation risks, especially in countries such as Venezuela;
uncertainties relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;
uncertainties relating to interpretation and enforcement of legislation in China governing direct selling;
uncertainties relating to the interpretation, enforcement or amendment of legislation in India governing direct selling;
our inability to obtain the necessary licenses to expand our direct selling business in China;
adverse changes in the Chinese economy, Chinese legal system or Chinese governmental policies;
our dependence on increased penetration of existing markets;
contractual limitations on our ability to expand our business;
our reliance on our information technology infrastructure and outside manufacturers;
the sufficiency of trademarks and other intellectual property rights;
product concentration;
changes in tax laws, treaties or regulations, or their interpretation;
taxation relating to our Members;
product liability claims;
whether we will purchase any of our shares in the open markets or otherwise; and
share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.

We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Contacts

Herbalife Ltd.
Barbara Henderson, 213-745-0517
SVP, Worldwide Corp. Communications
or
Amy Greene, 213-745-0474
VP, Investor Relations"

Applauds Connie Chung’s Decision to Withdraw from Event

JustTooMuchTime

05-01-2014, 10:17 PM

"The head of Herbalife Ltd. vowed Tuesday that the Los Angeles nutritional products company would emerge unscathed from a Federal Trade Commission investigation stronger than ever.

"I think it's going to clear the air, and I think it's going to be a very good day for Herbalife when this is all cleared up," Herbalife Chief Executive Michael O. Johnson said in an interview with The Times, shortly after the company's annual meeting at its downtown headquarters."

More:

Herbalife to emerge from FTC probe stronger than ever, CEO vows - latimes.com (http://www.latimes.com/business/la-fi-herbalife-plans-20140430,0,1433752.story#ixzz30WaRZrtK)

ribshaw

05-02-2014, 09:03 AM

Robert FitzPatrick replacing Connie Chung for Herbalife Distributor Panel discussion....

Would rather see them bring in another big name reporter. I like Fitzpatrick for what he does, but don't know that his name has the same pull or perceived impartiality as someone like Connie Chung. RP just seems to be setting up the MLM talking machine to cry witch hunt.

Whip

05-02-2014, 09:20 AM

Would rather see them bring in another big name reporter. I like Fitzpatrick for what he does, but don't know that his name has the same pull or perceived impartiality as someone like Connie Chung. RP just seems to be setting up the MLM talking machine to cry witch hunt.

Meanwhile clem is another one that sits in the corner crying that no one called him.

JustTooMuchTime

05-06-2014, 01:40 PM

This is the VOD of the Friday, May 2, 2014 event: Former Herbalife Distributors Speak Out, featuring a documentary and a Q+A session.

May 2, 2014 Webcast: Former Herbalife Distributors Speak Out | Facts About Herbalife (http://www.factsaboutherbalife.com/former-herbalife-distributors-speak-out/)

littleroundman

05-11-2014, 01:23 AM

The NY Post (http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/) is reporting:

(http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/)
Bugs found in Herbalife headquarters: report

Herbalife has found multiple hidden listening devices — bugs — in its Los Angeles headquarters, according to a report on Friday.
The bugs, discovered over the last year, were “non-governmental,” according to the report on Fox Business Network, which cited unidentified sources.

Fox did not say how Herbalife or its sources knew the bugs were placed by a private entity.

Herbalife has been locked in a heated battle with hedge fund activist Bill Ackman since December 2012. Ackman’s Pershing Square has bet more than $1 billion that Herbalife is a pyramid scheme and that it will be shut down by regulators and that its stock will sink to zero.

Herbalife, a multilevel marketer of nutritional shakes, strongly denies the allegation.

“Clearly the company feels it’s been spied upon by outside forces that are not the government,” FBN’s Charles Gasparino reported.

Gasparino later tweeted that Ackman denied any connection to the bugs.

“We have no idea and we are uninvolved in the listening devices found at [Herbalife] headquarters,” Ackman told FBN, according to the Gasparino tweet.

Herbalife shares rose slightly on Friday to close at $61.70 a share.
(http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/)

You can read the original report on NY Post.com (http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/)

JustTooMuchTime

05-13-2014, 09:56 PM

The NY Post (http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/) is reporting:

(http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/)

You can read the original report on NY Post.com (http://nypost.com/2014/05/10/bugs-found-in-herbalife-headquarters-report/)

I'm not going to rule out the possibility that Herbalife planted them themselves and then "newsworthily discovered" them at this point.

Whip

05-13-2014, 10:01 PM

I'm not going to rule out the possibility that Herbalife planted them themselves and then "newsworthily discovered" them at this point.

I just assumed they did. lol

JustTooMuchTime

05-14-2014, 10:30 PM

"An article published by the National Institute for Latino Policy (NILP) from La Opinion indicated that the Herbalife investigations are causing friction within the leadership of LULAC. La Opinion learned that at least nine presidents of LULAC expressed in their letters to lawmakers that they feel their leadership did not represent their positions regarding the issue on Herbalife Ltd. (NYSE:HLF)."

Full story:
Herbalife Ltd. Probe Creates Friction Within LULAC (http://www.valuewalk.com/2014/05/herbalife-ltd-probe-creates-friction-within-lulac/)

JustTooMuchTime

05-14-2014, 10:34 PM

"Coach Carl told me that if I didn’t want to bother with the GETFIT GETHOT exercise :: I could become a “mobile wellness coach” instead. Mobile wellness coaches loiter around in public spaces asking people to participate in “free wellness evaluations.” The evaluations invariably indicate that the participant could benefit from the lifelong consumption of Herbalife’s dramatically overpriced chemical soy isolates. “We’re generating lots of great leads like that …” Coach Carl told me."

Full story:

The Salty Droid – My Herbalife Job Interview (http://saltydroid.info/my-herbalife-job-interview/)

NikSam

05-14-2014, 10:46 PM

BULLETIN: Botafogo Soccer Club Dumps TelexFree (http://patrickpretty.com/2014/05/12/bulletin-botafogo-soccer-club-dumps-telexfree/)

Who is next ?

Herbalife Sports | Teams (http://sports.herbalife.com/en-US/Biographies/Teams.htm)

JustTooMuchTime

05-20-2014, 01:13 PM

"New short thesis on Herbalife

Regal Point issued its short thesis on Herbalife Ltd. (NYSE:HLF) last week. The firm states that Herbalife’s business model is not sustainable and that while recruitment is vital to success, it becomes difficult to recruit while regulators are scrutinizing the company. Marolia’s firm also points to the recent ABC News investigation into the controversial company, increasing regulatory probes, and sell-offs of Herbalife stock by institutional investors."

New short thesis on herbalife document is here - All You Need To Know In 3 Slides:
https://www.hvst.com/post/content/11391

"Regal Point Capital maintains short
exposure to Herbalife.

The best stocks to short are those of
companies involved in fraud, fads, or
failure. We believe that Herbalife fits all
three categories
.
The risks for Herbalife shareholders are
huge and growing as regulators, media
outlets, and institutions come to
understand the facts."

JustTooMuchTime

05-26-2014, 02:08 PM

"As it turns out, the anonymous blogger is neither an insider nor a finance pro but Jeffrey Gardner, 37, a cancer researcher at New York City’s Memorial Sloan-Kettering, an investigation by The Post and research by Pershing Square, shared with The Post, has shown."

"While it is clearer why Ackman (huge profits and an ego boost) and Herbalife (a fight for its survival) are battling, why would Gardner devote so much time and effort to boost Herbalife and keep his identity secret?
A love story

One possible answer is Sandy Chin.

Chin, 40, is Gardner’s longtime girlfriend, domestic partner and, throughout most of Gardner’s 15-month tweet-athon, an equity analyst with Visium Asset Management, a Manhattan hedge fund that owned Herbalife stock."

Full story:
Anonymous, influential Herbalife blogger unmasked | New York Post (http://nypost.com/2014/05/23/anonymous-influential-herbalife-blogger-unmasked/)

JustTooMuchTime

06-10-2014, 09:19 PM

Really interesting (as usual):

The Salty Droid – The Doxing of Michelle Celarier (http://saltydroid.info/the-doxing-of-michelle-celarier/)

JustTooMuchTime

06-10-2014, 09:27 PM

"Bill Ackman was guest host of CNBC's Squawk Box this morning, and following a question about what happens next with Herbalife, Ackman said: "I believe the government will start arresting people."

Read more: Ackman Herbalife Arrests Are Next - Business Insider (http://www.businessinsider.com/ackman-herbalife-arrests-are-next-2014-6#ixzz34IGsXlcT)

JustTooMuchTime

06-25-2014, 07:13 PM

Professor William Keep, dean of The College of New Jersey's School of Business, says in light of the BurnLounge ruling, regulators should take note of one possible warning sign about Herbalife.

William Keep Letter to SEC Chair Mary Joe White (http://www.scribd.com/doc/231325675/William-Keep-Letter-to-SEC-Chair-Mary-Joe-White)

littleroundman

06-25-2014, 07:41 PM

http://imageshack.com/a/img841/340/tptof.jpg
http://imageshack.com/a/img850/4274/luyp.jpg

JustTooMuchTime

07-07-2014, 12:09 PM

"Miguel Calderon is a retired construction worker with a sixth-grade education. He says an Herbalife Ltd. (HLF) distributor tricked him into squandering $30,000 in life savings on weight-loss shakes."

"Proving Herbalife did anything wrong won’t be easy, said Joel Winston, a former FTC lawyer who now works at Hudson Cook LLP in Washington.

“It’s not clear what responsibility Herbalife would have for what its distributors would say,” he said. “It really comes down to what evidence is there beyond individual consumers saying a distributor told me xyz. Can they show a pattern? Can they show that this happened routinely?”

Ummm. Really?

Full story...

Retiree With Sixth-Grade Education Says Herbalife Shakes Cost Him $30,000 - Bloomberg (http://www.bloomberg.com/news/2014-07-07/retiree-says-herbalife-shakes-cost-him-30-000-in-savings.html)

JustTooMuchTime

07-07-2014, 12:12 PM

"Gain on guaranteed money via Herbalife Ltd. (NYSE:HLF)

Gain apparently boldly claimed that his “proven step-by-step system” can teach new recruits how to make up to “$2,500/month part time” or “$5,000 or more per month” full time. It is unclear how a sales system can guarantee success in a forum that is indifferent to the independent sales skills of those reading the ad."

Full story:
Ackman Targets Another Herbalife Ltd. (HLF) Distributor (http://www.valuewalk.com/2014/07/ackman-targets-another-herbalife-distributor/)

ribshaw

07-07-2014, 03:43 PM

Retiree With Sixth-Grade Education Says Herbalife Shakes Cost Him $30,000
By Duane D. Stanford Jul 7, 2014 4:13 PM ET

Miguel Calderon is a retired construction worker with a sixth-grade education. He says an Herbalife Ltd. (HLF) distributor tricked him into squandering $30,000 in life savings on weight-loss shakes.

At the same time, Calderon says he signed an agreement after reading very little of it or the marketing documents that detailed Herbalife’s policies and pay structure.

“There was a small doubt in my mind always,” Calderon said in an interview, speaking Spanish. “But because you have a desire to work and make better, I continued.”

Calderon, 68, is one of at least 16 Latinos in the Chicago area who’ve filed consumer complaints with the Illinois attorney general, saying Herbalife duped them into buying tens of thousands of dollars worth of products they couldn’t sell. Herbalife, a direct seller that relies on independent contractors to distribute its wares, said it enforces inhouse rules governing distributors, investigates all claims seriously and welcomes “the opportunity to help the people mentioned in this story.”

Opening a business doesn’t guarantee success. Not all entrepreneurs work hard, while products wax and wane in popularity. About half of small businesses fail in the first five years, according to the Small Business Administration. The question for Illinois investigators, who can file criminal charges or a civil lawsuit, is whether the complainants were victims of false promises or didn’t prosper because they failed to follow Herbalife’s marketing plan.
Ackman Claims

Herbalife has spent the past 19 months warding off hedge-fund manager Bill Ackman’s claims it’s an illegal pyramid scheme. In their simplest form, pyramid schemes take money from new participants to enrich those at the top, independent of any product sales. Ackman has accused Herbalife of prospering on the backs of often undocumented Latinos, using products as a front for what amounts to illegal recruiting fees. Those with little English and a basic education are susceptible to scams, he has said.

“Ask yourself why poor Latinos would purchase overpriced nutrition products,” Ackman said in a March webcast hosted by his hedge fund, Pershing Square Capital Management LP.

In February, the League of United Latin American Citizens, America’s oldest Hispanic civil-rights group, flew with Calderon to Washington to lobby Federal Trade Commission Chairman Edith Ramirez. The following month, the company confirmed the FTC was probing its business. LULAC has since forwarded some of the Illinois complaints to the FTC.

Most of the complainants are undocumented, said Julie Contreras, who directs a local Illinois LULAC chapter and coordinated the filings.
Simple Narratives

Bloomberg News obtained copies of nine of the complaints. Filed between December and February and dating as far back as 2008, they include simple narratives, roughly a paragraph long, and supporting documents, such as order receipts and bank records. In general, the complainants say Herbalife deceived them, defrauded them of their money and should be shut down. The personal information was redacted.

Both Calderon and another former Herbalife distributor named Martil Palma granted interviews, saying they filed complaints with the attorney general. The men declined to provide unredacted versions of the documents, saying they feared jeopardizing the investigation. Cesar Caballero, the 49-year-old Herbalife distributor who worked with both men, also agreed to speak on the record.
Needed Work

Herbalife declined to provide details of its interactions with the men, except to say that each placed multiple orders over at least six months. The company says it provides needed work to Latinos. The FTC’s Ramirez, Illinois Attorney General Lisa Madigan and Ackman declined to comment. The shares rose 0.1 percent to $66.18 at the close in New York.

Calderon lives in Waukegan, a working-class city about 40 miles north of downtown Chicago. As often happens, he learned of Herbalife from a friend. In 2008, Calderon met Caballero at his nutrition club, a storefront where Herbalife distributors hand out samples, provide nutrition and weight-loss advice and encourage customers to order products for regular use or become distributors themselves.

For three mornings, Calderon said, he sampled shakes, herbal tea and an aloe concoction. On day three, he said, Caballero asked Calderon if he was ready to start a business. Calderon decided to open his own nutrition club. Under Herbalife rules, distributors get a discount of as much as 50 percent for such products as Formula 1 protein shake powder, Liftoff energy drink dissolving tablets and Cell-U-Loss herb pills. Selling at full retail, they can potentially double their money.
‘I’m Poor’

“I felt excitement and said, ‘OK, I’m poor and since I don’t have work, I’m going to do this,’” Calderon said.

Calderon said he paid an initial $1,300 for mostly protein shake powder, as well as a sample pack and a marketing DVD. From there, Calderon paid Herbalife $7,000 plus $1,500 a month for about a year, he said.

To market the products, Calderon said he outfitted a nutrition club thinking customers would buy the Herbalife merchandise as soon as he made it available.

“‘I would put a lot of spirit into trying to sell the product,’’ Calderon said. ‘‘In the snow we would go out and put up flyers.’’

He took training, as well, to learn how to recruit others into the business. The few people he approached wouldn’t listen, so he concentrated on retail sales instead, he said.
Too Expensive

As he poured money into Herbalife, containers of protein shake powder stacked up in the nutrition club, Calderon said. Customers trickled in or sampled shakes daily without ever ordering for home use, saying it was too expensive, he recalled. Calderon said the $30,000 in losses before he got out after about a year and a half included rent and supplies for the modest shop.

Calderon says he never questioned what he was told and signed his Herbalife distributor contract based mostly on Caballero’s explanation.

‘‘They weren’t easy to understand carefully without trouble, so I believed what he said,” Calderon said of the documents, published in English and Spanish. “I read the parts that I thought were most related to me.”

Palma, the second complainant who agreed to speak on the record, said he lost $16,000. Palma said he attended a sales meeting at a luxury hotel in downtown Chicago, where at least one speaker boasting of flying in for the meeting by helicopter.

“I thought to myself, ‘All these people can’t be making a mistake,’” Palma said in Spanish. “I was so impressed to see so many people.”
Signed Contract

Palma also said he signed a contract without reading it and doesn’t recall seeing a marketing plan.

“Yes, I did sign,” he said. “They put it in front of me and I signed it.”

He said he called the company to request a refund and was told one wasn’t available. At the time, Herbalife allowed distributors to return merchandise, less a 10 percent restocking fee and shipping charges, the company said.

In an interview, Caballero said Palma and Calderon failed to follow Herbalife sales methods despite attending training. He spoke mostly Spanish, which was translated by his adult son, who also sells Herbalife and runs fitness classes. Caballero said he doubted Calderon lost $30,000.

“It’s impossible,” Caballero said. “There are two stories to everything.”

Caballero has sold Herbalife products for about seven years and is part of Herbalife’s Millionaire Team, meaning his network of distributors has generated that much in retail sales. Inside his Waukegan nutrition club, a big-screen television plays Herbalife videos. Photos show Caballero, his wife and children on Herbalife trips to such exotic locations as Hawaii.
Hard Work

Caballero said his distributors who work hard succeed. One is Ismael Hernandez, who opened a nutrition club in 2008 and was able to quit his job as a dispatcher for a temp company after six months.

Hernandez says his club has between 80 and 150 members, 80 percent of whom aren’t distributors themselves, he said. They pay $5 a visit, take Zumba fitness classes and order product for home use, he said. Hernandez recently opened a second club.

“When you know the marketing plan, it’s easy,” he said, referring to a 124-page document that describes how wholesale profit, commissions and royalties are paid to 18 levels of distributors, all based on so-called volume points that vary depending on the product being sold.
What Evidence

Proving Herbalife did anything wrong won’t be easy, said Joel Winston, a former FTC lawyer who now works at Hudson Cook LLP in Washington.

“It’s not clear what responsibility Herbalife would have for what its distributors would say,” he said. “It really comes down to what evidence is there beyond individual consumers saying a distributor told me xyz. Can they show a pattern? Can they show that this happened routinely?”

Today, Calderon’s nutrition club is closed. He gave away and sold for pennies on the dollar some of the leftover Herbalife merchandise. He said he lost his house.

“We feel that this has been like a fraud that has come to us,” Calderon said.

His dream of making it big in the direct-selling business didn’t end there. Calderon became an authorized representative for a direct seller of cookware, until his children persuaded him to get out.

Retiree With Sixth-Grade Education Says Herbalife Shakes Cost Him $30,000 - Bloomberg (http://www.bloomberg.com/news/2014-07-07/retiree-says-herbalife-shakes-cost-him-30-000-in-savings.html)

JustTooMuchTime

07-14-2014, 11:29 PM

"
Sam Antar is a convicted felon and former CFO of Crazy Eddie's.
He's gone from running organized crime under the guise of a public company, to assisting the government with unmasking white collar crime, accounting fraud and securities fraud.
Mr. Antar concludes that Herbalife is "predatory capitalism" at its best and a bona fide scam at its worst; he claims CEO Michael Johnson sells fantasy to exploitable people."

Full story:
http://seekingalpha.com/article/2313875-white-collar-crime-expert-slams-herbalife-an-exclusive-interview-with-sam-antar

JustTooMuchTime

08-01-2014, 10:43 AM

"It was a PR failure,” Ackman said. “I think we raised expectations. People were looking for the dead body and the smoking gun and instead what they got was a three-hour detailed regulatory presentation.” "

‘Conscripted Consumption’

Last week, Richard and Ackman said distributors at Herbalife clubs use false promises of riches and a fraudulent training program to force poor Latinos to buy weight-loss shakes one at a time. Programs such as Club 100 create a kind of “conscripted consumption” of its meal-replacement shakes, teas and aloe drinks, generating artificial demand, Richard said.

Richard alleges such programs are pervasive within Herbalife’s 4,000 nutrition clubs in the U.S. and many more overseas, mostly in Latino neighborhoods and countries. Pershing Square’s undercover investigators looked at 240 clubs, mostly in the U.S., as well as in Mexico and South America, according to a spokesman for the hedge fund.

Stopping the training programs would severely crimp sales, Richard said. Herbalife will eventually collapse under its own weight and should be shut by regulators now, Ackman has argued.

“It seemed like the presentation got so crushed by the stock-market response,” said Richard, who issued a press release earlier this week standing by her research. “That sort of gave people permission to say, ‘Ah, there must be nothing here because the stock market tells me so.’”

Full story:
Ackman Says (http://www.bloomberg.com/news/2014-07-31/ackman-says-my-bad-on-herbalife-presentation.html)

JustTooMuchTime

08-06-2014, 09:57 AM

"Club 100 :: a subsystem which combines Nutrition Clubs with a rigorous conscripted consumption based “training” program … dominates Herbalife’s operations in Central and South America. It was so effective :: and so brilliant at ******* over poor people … that it was basically internalized by Herbalife corporate and spread worldwide.

Club 100′s ubiquitous branding represents a two-sided progression :: one side is about training and building daily consumptions … the other about club duplications. The oft promised reward for following the dual path to its completion :: the $300,000+ per year of the President’s Team … is an unattainable lie."

The Salty Droid – Conscripted Consumption at Club 100 (http://saltydroid.info/conscripted-consumption-at-club-100/)

JustTooMuchTime

08-15-2014, 11:32 AM

"It isn't too late for Herbalife to fix the problem. The company could offer new salespeople a choice between the current model and an alternative membership program that offered discounts, but not cash commissions. For the 78 percent of distributors without recruits, this alternative program would be preferable. They don't earn any commissions anyway, and they wouldn't have to sign a lengthy contract.

Versions of this kind of program are familiar in multilevel marketing. Companies including USANA Health Sciences, Nu Skin and Melaleuca offer something called a preferred-customer option. Their preferred customers can sign on as full members whenever they like. Generally, however, the firms do not disclose the percentage of their members who are only preferred customers. Herbalife would have to do so to assuage investors' concerns.

If this preferred-customer option were popular, the numbers would support Herbalife's case. It would allow the company to distinguish itself from the multilevel marketer BurnLounge, which sold music online and had a preferred-customer option. Only 3.2 percent of BurnLounge members chose the discounts instead of the cash, which was part of the reason that the Ninth Circuit Court of Appeals ruled the company a fraudulent pyramid scheme earlier this year. Almost all of BurnLounge's members had hoped to make money by bringing their friends and their friends' friends into the business, it seemed."

Full story:
One way Herbalife could show it’s not scamming customers - The Washington Post (http://www.washingtonpost.com/blogs/wonkblog/wp/2014/08/08/one-way-herbalife-could-show-its-not-scamming-customers/)

JustTooMuchTime

08-29-2014, 12:02 PM

Crazy stuff.

"After the wives were paid off, Mark's estate was still worth an estimated $300 million at the time of his death. Mark's sole heir was his son Alexander Hughes, who was eight years old at the time."

"According to a court-ordered audit, in 2005, the value of 13 year old Alex Hughes' trust fund had grown to $400 million. Unfortunately for Alex, he wouldn't be able to touch the money until he turned 35, in the year 2027. In the meantime, he would receive an estimated $250,000 stipend every year which would some day grow to $2 million per year"

"Tower Grove, the impressive property Mark bought from Merv Griffin in 1997 for $8.5 million, was recently valued at $120 million. If at some point the land sells to a developer, Alex Hughes stands to make a massive profit."

The Absolutely Insane Life And Death Story Of Herbalife Founder Mark Hughes | Celebrity Net Worth (http://www.celebritynetworth.com/articles/entertainment-articles/absolutely-insane-life-death-story-herbalife-founder-mark-hughes/)

Whip

08-29-2014, 01:26 PM

wonder why none of his own wonder products couldn't help him sleep and not be depressed.

JustTooMuchTime

09-11-2014, 11:58 PM

"The investigators pulled back the curtain on a scam that forces those seeking to open Nutrition Clubs, and their family members and friends helping them pursue their dream, into conscripted consumers. These scamming club owners forced aspiring club owners to perform expensive and time-consuming tasks such as touring Clubs and paying to consume at every club, working for free in an upline distributor’s Club and being required to consume while working, as well as “practicing” making hundreds of shakes that family members or friends are expected to buy and consume."

Full article:
Christine Richard Weighs In On Herbalife Ltd. (HLF) Clubs (http://www.valuewalk.com/2014/09/christine-richard-weighs-in-on-herbalife-ltd-hlf-clubs/)

JustTooMuchTime

09-22-2014, 05:34 PM

"Shares of Herbalife, which have been falling steadily in recent months, tumbled by 10% to $40.21. Ackman has called Herbalife a pyramid scheme and his Pershing Square hedge fund has made a big bet against the company. Herbalife’s stock has now dropped by nearly 50% this year, fueling the very strong performance of Pershing Square, which in 2014 is outperforming just about every hedge fund on the planet. At one point on Monday, Herbalife’s stock hit a 52-week low of $38.63."

Full story;
Shares Of Herbalife Fall Sharply - Forbes (http://www.forbes.com/sites/nathanvardi/2014/09/22/shares-of-herbalife-fall-sharply/)

JustTooMuchTime

10-06-2014, 07:49 PM

"Herbalife said it named Pamela Jones Harbour, who was an FTC commissioner from 2003 to 2010, as senior vice president, global member compliance and privacy. She will be in charge of the company's 300-member compliance team and coordinate global compliance."

Full story:
Exclusive: Herbalife hires former U.S. regulator to head compliance team (http://news.yahoo.com/exclusive-herbalife-hires-former-u-regulator-head-compliance-100322616--finance.html)

Soapboxmom

10-06-2014, 11:42 PM

Oh boy! An insider.

Char

10-07-2014, 06:33 AM

If Ms. Harbour does her job thoroughly, this should be the final nail in the coffin. Why?

The MLM system is inherently flawed hence the very reason why clubs, tools scams, and exaggerated claims exist in the first place. Duhhh

JustTooMuchTime

10-08-2014, 10:31 PM

Pamela Harbour, former FTC Commissioner:

"There have been times in my career where I’ve stuck my neck out, but I only will do that if I’m really confident of my own convictions and willing to live with the consequences,” she said in an interview. “This is one such instance.”

"Harbour also is an Herbalife customer. She said she bought her first Formula 1 weight-loss shake powder, Herbalife’s best-selling product, from a family member at a reunion in 2004 just to be nice. She liked it, though, especially the Cookies ’n Cream flavor, and would occasionally mix up a shake for dinner after a long night at the FTC. She bought more at future reunions."

"Harbour said she’s satisfied that Herbalife executives are committed to compliance and that she sees “substantial efforts” and “considerable investments.”

“Compliance should be a part of a company’s culture, and I got that very strong sense when I was at Herbalife,” she said."

Full story:

Herbalife (http://www.bloomberg.com/news/2014-10-08/herbalife-s-new-compliance-chief-comfortable-risking-neck.html)

You know, because if it turns out that Herbalife is convicted of running a massive pyramid scheme, it's ok, because they can always promise not to do it any more.

Whip

10-08-2014, 10:40 PM

She like it so much........she would wait until the next reunion to buy it. Even of that reunion was 10 years away i guess. Why not just find a local rep to buy it from or or have her relative sell her more and ship it? Wonder if she wandered on over to the FDA to see if the crap really contributed to weight loss. That would be a ringing endorsement. Kinda get the feeling she's selling her soul.

JustTooMuchTime

11-18-2014, 09:59 AM

Here's a snippet of the letter Ackman sent to Pamela Jones:

"Herbalife operates the largest and best-managed pyramid scheme in the world.

Consider what would happen if, in all meetings with potential recruits, the recruiters were required to remind the audience clearly of certain key facts, for example:

88% earn nothing from the Company;
Most money goes to the top 1%;
Members churn rapidly and leave the system;
Most distributors suffer net losses after accounting for time and money spent;
Herbalife does not track retail sales;
Millions of recruits have come and gone in recent years."

Ethan Vanderbilt has more here:
Bill Ackman Confronts Herbalife (http://ethanvanderbuilt.com/2014/11/08/bill-ackman-confronts-herbalifes-pamela-jones-harbour/)

JustTooMuchTime

12-04-2014, 08:15 PM

"Herbalife Agrees to Settle “Pyramid Scheme” Class-Action Lawsuit for $15 Million"

"The "multi-level marketing" company Herbalife, which recruits individuals as distributors who sell its products to friends, family, and other consumers, has agreed to pay $15 million to settle a class-action lawsuit that alleges its business model is a pyramid scheme. The suit was initiated by a Herbalife distributor in California who says the company violates that state's colorfully named Endless Chain Scheme Law. From Bloomberg:"

Herbalife says:

"We are fully confident that we would have prevailed,” Herbalife General Counsel Mark Friedman said in an e-mailed statement."

Full story:
Herbalife pyramid scheme lawsuit: $15 million settlement in class action. (http://www.slate.com/blogs/the_slatest/2014/11/03/herbalife_pyramid_scheme_lawsuit_15_million_settle ment_in_class_action.html)

JustTooMuchTime

12-15-2014, 05:36 PM

SEC Drops Herbalife Inside-Trade Case After Witnesses Leave U.S.

"The SEC is seeking to withdraw its case against Jordan Peixoto because two “essential” witnesses left the U.S. for Poland and are unavailable to testify, according to a filing by the agency’s staff in administrative court today."

...

"There were significant legal and fact problems with this action that cried out for this dismissal,” Derrelle Janey, Peixoto’s lawyer, said in a statement. “The division of enforcement should be applauded for doing the right thing.”

Full story:
SEC Drops Herbalife Inside-Trade Case After Witnesses Leave U.S. - Bloomberg (http://www.bloomberg.com/news/2014-12-15/sec-drops-herbalife-inside-trade-case-after-witnesses-leave-u-s-.html)

JustTooMuchTime

12-17-2014, 11:01 PM

"Dec. 17 (Bloomberg) -- Bill Ackman, chief executive officer at Pershing Square, discusses new internal video he’s obtained to back up his allegations that Herbalife is a pyramid scheme two years after his short call on the company..."

http://www.youtube.com/watch?v=v6dUplyzBgE

JustTooMuchTime

12-17-2014, 11:06 PM

Video Released by Pershing Square Capital Management Exposes Senior Distributors Admitting that Herbalife Uses a “Level of Inauthenticity,” leading to “Eventual Deception”

http://www.youtube.com/watch?v=452x2C4cFds

White paper about the video from Pershing Square Capital Management, L.P. is here:
http://www.factsaboutherbalife.com/media/2014/12/Herbalife-Anaheim-2005-White-Paper-12.17.14.pdf

From the whitepaper:

"At the outset, we highlight just a
few of the most remarkable statements:

―We sell people on a dream business, that they can make it. Yet
deep down inside, what do we really know? Yeah. We know that
the reality is that most of them aren‘t going to make it.‖
(Disc 1, 1:00:16.)

―Who wants to bring their family into a struggle to make it? Who
wants to bring their family into an eventual deception?‖
(Disc 2, 7:20.)

―We tell people, hey, you know, sign on the dotted line, you know,
start working from home, it‘s going to be unbelievable, you‘re
going to have this incredible life. . . . So there really is this
situation or this level of inauthenticity that‘s there.‖
(Disc 2, 8:28.)

―The Herbalife business model is based on distributors purchasing
volume from them. . . . The Herbalife business model, at this point
in time, is not based on customers purchasing, it‘s based on
distributors purchasing volume.‖
(Disc 2, 14:34.)

―These sixty thousand people [whom the speaker lost as
distributors over the preceding five years], primarily, why do you
think they came into the business? Primarily? Primarily?
Opportunity! Money! Right?‖ (Disc 1, 46:05.)

―
[S]uccessful people in retailing in our business, it‘s a very small
percentage.‖ (Disc 2, 28:08.) ―The majority of our people have a
difficulty in selling products, in general.‖ (Disc 2, 29:46.)

―‘Fake it ̳til you make it.‘ Some of us got so good at f
aking it, we forgot to make it!‖ (Disc 1, 54:04.)

The video demolishes any suggestion
by the Company or its defenders that
deceptive recruiting practices and
misleading income claims are the work of a few bad
actors in the Herbalife distributor ranks."

Later in the white paper:

"And then, just to demolish any suggestion that
Herbalife‘s overall business has anything to do
with selling products to genuine retail customers, Gratziani declares,
in no uncertain terms:

"The Herbalife business model is based on distributors purchasing
volume from them. OK? And that‘s, that‘s really the Herbalife
business model. The Herbalife business model, at this point in
time, is not based on customers purchasing, it‘s based on
distributors purchasing volume. And we are paid, through the
marketing plan, we have levels through the marketing plan, and
that volume that gets purchased from the Company in our
organizations, that is going to give us what our business results are."

NikSam

12-18-2014, 12:55 AM

Here is 3h Insiders video Bill talked about: Herbalife Unmasked - Full Presentation | Facts about Herbalife (http://www.factsaboutherbalife.com/herbalife-unmasked-full-presentation/)

scratchycat

12-18-2014, 12:38 PM

littleroundman

12-18-2014, 09:07 PM

Here is 3h Insiders video Bill talked about: Herbalife Unmasked - Full Presentation | Facts about Herbalife (http://www.factsaboutherbalife.com/herbalife-unmasked-full-presentation/)

https://www.youtube.com/watch?feature=player_detailpage&v=3q_lSYGbufg

littleroundman

12-18-2014, 09:08 PM

https://www.youtube.com/watch?v=bNwjVfNqCM0&feature=player_detailpage

littleroundman

12-18-2014, 09:09 PM

https://www.youtube.com/watch?feature=player_detailpage&v=HRBRzxQgans

JustTooMuchTime

12-28-2014, 11:18 PM

"A year-long investigation, in which ABC News sent two reporters undercover as Herbalife recruits, revealed in April a company that has struggled to prevent its distributors from embellishing the financial prospects of a sales career there and hyping the health benefits of its products.

ABC News found that nearly 600 independent distributors of the diet and nutrition sales brand Herbalife had been disciplined in 2013 for making medical claims when selling the company’s weight-loss shakes and supplements, despite company policies aimed at preventing such tactics."

Investigative Unit 2014: Going Undercover in Herbalife - ABC News (http://abcnews.go.com/US/investigative-unit-2014-undercover-herbalife/story?id=27811094)

JustTooMuchTime

12-28-2014, 11:21 PM

"The Food and Drug Administration has asked Herbalife to stop airing a video the regulator claims gives the false impression that its weight-loss shakes and other products have gotten the FDA seal of approval.

The agency has no oversight over natural dietary supplements, it said in a letter to Herbalife CEO Michael Johnson requesting the YouTube video and any ads that use the video be taken down and not shown."

Full story:

FDA to Herbalife: Stop suggesting we approve your products | New York Post (http://nypost.com/2014/12/19/fda-to-herbalife-stop-suggesting-we-approve-your-products/)

littleroundman

12-29-2014, 06:08 AM

http://imageshack.com/a/img673/5788/DGSoiD.jpg

You can view the original story on New York post (http://nypost.com/2014/12/19/fda-to-herbalife-stop-suggesting-we-approve-your-products/)

littleroundman

12-29-2014, 06:43 AM

Investigative Unit 2014: Going Undercover in Herbalife - ABC News (http://abcnews.go.com/US/investigative-unit-2014-undercover-herbalife/story?id=27811094)

https://www.youtube.com/watch?v=oGT3RW182xk&feature=player_detailpage

littleroundman

12-29-2014, 06:45 AM

Full story:

FDA to Herbalife: Stop suggesting we approve your products | New York Post (http://nypost.com/2014/12/19/fda-to-herbalife-stop-suggesting-we-approve-your-products/)

https://www.youtube.com/watch?v=tTZARCS_gSM&feature=player_detailpage

JustTooMuchTime

01-07-2015, 08:07 AM

"Herbalife’s stock took a dive on Tuesday for the second consecutive day, indicating more bad news for the embattled Los Angeles nutritional supplement company and more good news for hedge fund manager Bill Ackman.

Tuesday’s 8 percent drop came after CNBC reported that Paul Sohn, the chief architect of Soros Fund Management’s bullish bet on Herbalife, had quietly departed from the firm last year. That added on to a 12 percent tumble for Herbalife stock on Monday.

Sohn is rumored to be the man who got Soros into its position on Herbalife in the first place. He told fund managers at an idea dinner that “George Soros broke the Bank of England” and that “George Soros can break the back of Ackman,” the New York Post reported in 2013."

Full story:
Herbalife Continues to Plummet | Los Angeles Business Journal (http://labusinessjournal.com/news/2015/jan/06/herbalife-continues-plummet/)

JustTooMuchTime

01-07-2015, 10:19 PM

" Activist investor Bill Ackman renewed his attack on Herbalife during a CNBC interview Wednesday, likening the nutrition and weight management company to Bernie Madoff.

"Herbalife, we're doing God's work," he added.

"When you shine sunlight on Madoff it makes it difficult for Madoff to find victims. The same thing is happening at Herbalife," the founder of the $18 billion Pershing Square Capital Management hedge fund said on "Squawk Box" as the show debuted in its new home in New York City."

...

" Ackman also claimed: "You have a flight of top [Herbalife] distributors, senior employees from around the world, contacting us, contacting the government, sharing information."

Ackman also claimed: "You have a flight of top [Herbalife] distributors, senior employees from around the world, contacting us, contacting the government, sharing information."

The company did not respond to a CNBC request for comment."

Full story:

Bill Ackman: How Herbalife is like Bernie Madoff (http://www.cnbc.com/id/102314897)

Link to video: Bill Ackman: How Herbalife is like Bernie Madoff (http://video.cnbc.com/gallery/?video=3000344531)

JustTooMuchTime

01-08-2015, 05:58 PM

"Published: Jan 7, 2015 5:25 p.m. ET

SAN FRANCISCO (MarketWatch) -- Herbalife HLF, +7.98% said late Wednesday that comments made earlier in the day by Pershing Square hedge fund billionaire Bill Ackman were "entirely predictable." The company said "with his Herbalife put options expiring next week, he is off on yet another tirade of misrepresentations, the sole purpose of which is to drive down our share price." Ackman, who has been on a lengthy campaign against the nutritional supplements seller, made more critical comments in a TV interview earlier Wednesday."

Herbalife dismisses latest Ackman comments - MarketWatch (http://www.marketwatch.com/story/herbalife-dismisses-latest-ackman-comments-2015-01-07)

JustTooMuchTime

01-12-2015, 08:56 PM

"Fox Business, Charlie Gasparino, reports that Herbalife is in the process of filling stock manipulation charges against the billionaire investor."

"“I do know they are prodding regulators, SEC, I would even think the justice department to go after him. To say that this guy is doing stuff, leaking stuff, going after the company saying stuff to move the stock and to profit off that,” said Mr. Gasparino."

"Gasparino maintains it might be a dead end for Herbalife Ltd. (NYSE:HLF) on its pursuit of Ackman considering there has not been any company that has been successful on this front. The analyst also notes that regulators perceive short selling as an important aspect of trading as it always goes a long way in keeping the market safe."

Read full story at Is Herbalife Ltd. (HLF) Suing Bill Ackman Over Stock Manipulation Allegations? - Insider Monkey (http://www.insidermonkey.com/blog/herbalife-ltd-hlf-suing-bill-ackman-over-stock-manipulation-allegations-337523/#uAMlWwPxxCAwQkvt.99)

kath

01-13-2015, 10:21 PM

wow! if true, that would be really stupid on Herbalife's part! it would 'open the door' so to speak on the true financials of the company for the entire world to see....really give high profile to the issue eh? true they are a publicly traded co. and anyone can access the annual reports, quarterlies etc, but a court case would be in your face not to be ignored news fodder!

littleroundman

01-13-2015, 11:27 PM

it would 'open the door' so to speak on the true financials of the company for the entire world to see...

Obviously I can't know, but, I wouldn't mind betting getting Herbalife into open court has always been part of the plan

JustTooMuchTime

01-14-2015, 01:06 PM

"It’s an embarrassment to the country that this company exists,” he told reporters after speaking at a church gathering in Chicago. He said the effective value of his bet is $1.2 billion."

....

"Herbalife has vehemently denied Ackman’s allegations that its business is a pyramid scheme. The company described his church appearance as “the latest stunt in Ackman’s ongoing campaign to drive down our share price for profit.”

Herbalife will fail because increased transparency about its practices, due to scrutiny from Ackman and regulators, has made it harder for the company to recruit distributors for its products, Ackman said."

From: Ackman renews attacks on Herbalife, says it will be gone within a year - Fortune (http://fortune.com/2015/01/13/ackman-renews-attacks-on-herbalife-says-it-will-be-gone-within-a-year/)

JustTooMuchTime

01-28-2015, 10:43 PM

The Droid has continued to post, there was one post about Tony Robbins. The most recent post is about an Herbalife seminar he attended. Just a heads up - I keep getting errors when I try to post there - hope you'll have better luck.

The Salty Droid – Hurricane Herbalife (http://saltydroid.info/hurricane-herbalife/)

JustTooMuchTime

01-30-2015, 12:12 PM

Article is mainly about Herbalife in Columbia.

"Despite its troubles in the US, after its first full year of operation in Cambodia, Herbalife says it sees “no obstacles to growth.”

“The case that happened in America did not happen in Cambodia,” said country manager Sin Dina.

Dina touted Herbalife’s memorandum of understanding with the Anti Corruption Unit, signed on December 9 last year, as proof that the company “fully complies with the laws of Cambodia”.

“We believe Cambodia needs nutritional products for a healthy life,” he said. “In life, you don’t need only dollars.”

Some crazy stuff in the article:
Herbalife sees (http://www.phnompenhpost.com/post-weekend/herbalife-sees-no-obstacles-looking-ahead)

JustTooMuchTime

03-02-2015, 12:33 AM

"Herbalife said Johnson, who is also chairman, received total compensation of $6.73 million last year, down from $10.5 million in 2013, mainly because he did not receive the incentive plan compensation of $3.7 million he got the prior year."

...

"Explaining its decision to not pay out incentive awards to Johnson and other top executives, Herbalife said target amounts for the applicable performance goals were not met, such as levels it set for earnings per share and sales growth in 2014."

Full story:

Herbalife cuts pay of CEO Johnson 36 percent after missed targets | TODAYonline (http://www.todayonline.com/business/herbalife-cuts-pay-ceo-johnson-36-percent-after-missed-targets)

JustTooMuchTime

03-31-2015, 07:26 PM

"WASHINGTON (Reuters) - Hedge fund mogul William Ackman, who has spent more than two years accusing Herbalife Ltd <HLF.N> of running a pyramid scheme, said on Monday that shutting down the company is "one of the most important things" he can do."

...

"Ackman said that when he first bet against Herbalife, he had not anticipated that another billionaire investor, Carl Icahn, would come in, take a long view on the company and "go on CNBC once a week saying how great the company was and how bad I was."
Had Icahn not shown up, Ackman said, the whole thing would be over in a few months and Herbalife's alleged pyramid scheme would have collapsed."

Full story:

https://ca.news.yahoo.com/ackman-says-shutting-herbalife-down-key-him-204735761--sector.html

JustTooMuchTime

04-07-2015, 09:37 PM

Originally posted by RealScam member Luzer (http://www.realscam.com/members/luzer/) here (http://www.realscam.com/f47/herbalife-1094/index3.html#post84506).

I'm posting the article here as it's an important development in the Herbalife News events:

"(Reuters) - U.S. federal law enforcement agencies contacted several top Herbalife Ltd <HLF.N>
members last week seeking information on their business practices, CNBC reported, citing sources
familiar with the matter.

The inquiries are focused on the activities of about 10 top Herbalife members, CNBC said, citing sources.
The company is offering members assistance in obtaining legal counsel, although it is unclear how
many have opted for representation, CNBC said."

Full story:
http://finance.yahoo.com/news/top-herbalife-members-contacted-law-enforcement-agencies-cnbc-045613858--sector.html

Luzer

04-17-2015, 07:13 PM

The FTC began investigating Herbalife in March 2015. It's over a year now. I wonder when they'll issue a ruling and I wonder if the have the will to shut down this scam?

Soapboxmom

10-28-2015, 05:27 PM

Herbalife Under Fire From State Senator Seeking Crackdown - Bloomberg Business (http://www.bloomberg.com/news/articles/2015-10-27/herbalife-declines-after-n-y-state-senator-proposes-crackdown)

Herbalife Ltd. has come under attack from a New York state senator and public advocate, who called the company a pyramid scheme and proposed cracking down on its sales practices.
State Senator Jeff Klein, working with Public Advocate Letitia James and advocacy group Make the Road New York, said in a report (https://www.nysenate.gov/sites/default/files/the_american_scheme_-_full_report.pdf) on Tuesday that they compiled data on 56 victims, who filed complaints against Herbalife since 2004, they lost an average of $20,000. The investigation also looked at 60 so-called nutrition clubs -- the groups that help sell Herbalife’s weight-loss shakes and supplements -- in the Bronx, Queens and Brooklyn. Klein and James plan to introduce a bill in the coming weeks that will impose stricter regulations on multilevel marketing firms like Herbalife, which rely on independent distributors.
Herbalife “needs to be held accountable,” according to the report. “For too long the company has masked an illegal pyramid scheme.”
Pershing Square

Herbalife’s foes also include billionaire hedge-fund manager Bill Ackman, who began calling the company an illegal pyramid scheme in 2012. Ackman’s firm, Pershing Square Capital Management, bet $1 billion against the stock at the time. It also has hired outside firms to investigate Herbalife.....

FTC Probe

Herbalife has repeatedly denied Ackman’s accusations, but the criticism has prompted a probe by the U.S. Federal Trade Commission.
“We look forward to working with anyone who is interested in making the industry stronger,” Herbalife said in an e-mailed statement. The company is reviewing the report......

More Transparency

Klein’s proposed bill would require multilevel marketing firms to be more transparent about how well the people who try its strategies perform. This would include average income and franchisee turnover.
One of Ackman’s main points is that Herbalife distributors are compensated more for recruiting people to the business, rather than selling products to consumers. That’s seen as a hallmark of pyramid schemes. Herbalife has countered this argument by saying it doesn’t record who is the end user because it only sells to distributors. It has also pointed to third-party surveys that show its products have about 8 million customers in the U.S.
Klein and his partners said their investigation found Herbalife distributors hyped the health claims of the company’s products.....

Companies like Herbalife “set up rules and regulations to avoid being categorized as running illegal pyramid schemes as defined by the FTC, but in reality the rules are not enforced,” according to the report. “Instead, the company turns a blind eye to the illegal pyramid scheme it promotes.”

Soapboxmom

11-04-2015, 11:04 AM

What Will Happen To Herbalife When The Government Kills The 'Golden Goose'? - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

(http://seekingalpha.com/article/3642176-what-will-happen-to-herbalife-when-the-government-kills-the-golden-goose?auth_param=184eqq:1b3j9k6:ff6e88a32099f3a73f 92e295f3f146fb&uprof=45&dr=1)

https://staticseekingalpha.a.ssl.fastly.net/images/users_profile/000/280/886/big_pic.png?1239199820 (http://seekingalpha.com/author/matt-stewart) Matt Stewart (http://seekingalpha.com/author/matt-stewart)
Long/short equity
Profile (http://seekingalpha.com/author/matt-stewart)| Send Message| Follow (702 followers)
Performance (http://seekingalpha.com/pro/checkout?notice=pro&source=article_performance_link)

What Will Happen To Herbalife When The Government Kills The 'Golden Goose'? Nov. 4, 2015 1:31 AM ET | 22 comments (http://seekingalpha.com/article/3642176-what-will-happen-to-herbalife-when-the-government-kills-the-golden-goose?auth_param=184eqq:1b3j9k6:ff6e88a32099f3a73f 92e295f3f146fb&uprof=45&dr=1#comments_header) | About: Herbalife Ltd. (HLF) (http://seekingalpha.com/symbol/HLF)
Disclosure: I am/we are short HLF. (More...)

...Investors who own Herbalife (NYSE:HLF (http://seekingalpha.com/symbol/HLF)) were treated to Q3 earnings after the close today. Or were they tricked? With earnings reported so close to Halloween, one has to wonder......

As we look at this quarter's results, some interesting data points pop out. First, the company started the year with 4.0 million Members. As of the end of Q3 the company has 4.0 million Members. According to the company's own regional key metrics disclosures, 1.6 million new Members joined Herbalife YTD. Solving for X, that means 1.6 million people churned out of the pyramid since December 31. That is certainly some impressive velocity. Annualized, over 2 million people will quit Herbalife in 2015 alone. I like to call that data point "Churn". I think the FTC also pays attention to this data point....

However, they certainly seem to mind when your marketing plan promotes recruiting, inventory loading, and an endless chain of salespeople all trying to qualify to advance in a money making venture.....

Ask anyone at Vemma what the FTC thinks about endless recruiting chains. I am sure they will be happy to let you know that they just didn't see the injunction coming until it was too late....

As lottery players head for the exits and recruiters aren't able to, well, recruit. Who knows how far the company's revenues and cashflow might fall?...

Herbalife tells us they are excited for 2016. Sandbag earnings guidance of $4.70 or so is the order of the day. The company's bankers are looking forward to another material downstroke in March of 2016. The company continues to recruit over 500,000 new members a quarter. And so, the beat goes on. Until, of course, it doesn't....

Honestly, at this point, how likely is it that the government comes back with a Naked Gun "There's Nothing to See Here" v. some sort of smoking gun?....

Herbalife is a global pyramid scheme folks. Its marketing plan is the very definition of a "pay to play" incentive scheme. Participants buy inventory because they think it is going to help them get rich and recruit others to do the same. This is a big "no no" according to the law......

Unfortunately for MOJ and his "Golden Goose", their days are numbered.....

Because companies that rely on an endless chain of recruits for sustenance are downright illicit. It's really just as simple as that.

There are a few juicy snippets to entice everyone to read the whole article. It is definitely worth popping over to Seeking Alpha. Typical loss of 50% of the sales force yearly. And, that will only get worse as so many have already been burned in this deal. The Titanic is sinking fast!

Soapboxmom

01-04-2016, 03:17 PM

Another incredible read:

Have Herbalife Executives Already Confessed Publicly? - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/3788836-have-herbalife-executives-already-confessed-publicly?auth_param=184eqq:1b8lkdu:87fb8b1a543fb4c 1e68da1391689d3cd&uprof=45&dr=1)

Soapboxmom

02-25-2016, 11:59 AM

Herbalife Earnings Preview: Key Things To Watch - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

(http://seekingalpha.com/article/3929496-herbalife-earnings-preview-key-things-watch?auth_param=184eqq:1bcuaqm:94ff0d854e073a6b6f c5d294172bad7d&uprof=45&dr=1#alt1)
Herbalife is a pyramid scheme. Perhaps the most critical data points to look for in this earnings release are as follows.

1. What is the size of the pyramid? You will be able to find that information on the first few pages of the 10k.
2. Did the pyramid grow at all year over year? You will be able to find that data point by comparing last year's 10k to this year's 10k.
3. How many people did the company recruit last year? This information is found at ir.herbalife.com in the Regional Key Metrics disclosure filed quarterly. You can find it here (http://files.shareholder.com/downloads/ABEA-48ZAJ9/1371223723x0x843891/ECC08357-A2E7-4162-9E30-72BE740DC3B7/Quarterly_Breakout_Key_Metrics_6_Regions.pdf).
4. How many Members churned out of the pyramid? This data point is arrived at using simple Algebra. Size of Pyramid a Year Ago + New Members Recruited - X = Size of Pyramid Today where X = the number of people who quit. I like to call these people victims....

The company simply must recruit roughly 2 million people per annum in order to sustain its cashflow....Herbalife Sales Leaders have to prospect somewhere between 10 million and 100 million people annually worldwide to recruit 2 million new people.
I consider this mathematical reality an obvious headwind for the company considering the fact that we know so many Herbalife Members last less than 2 years with the company....
the company is running out of countries to market. Secondly, in all likelihood material changes are coming to the company's Marketing practices due to FTC enforcement. Finally, because the pyramid has grown to be so large at 5 million Members total, growth becomes extremely difficult due simply to the law of large numbers....to avoid all of this risk as a long you have to bank your money on one simple thing. I think they call it RECRUITING!...

The article is an excellent, informative and wickedly humorous read.

littleroundman

02-25-2016, 08:37 PM

Yahoo News (http://finance.yahoo.com/news/herbalife-says-talks-ftc-outcome-231421915.html) is reporting

http://imageshack.com/a/img922/2094/EfP1R1.png

You can read the original story here on FINANCE.YAHOO.COM (http://finance.yahoo.com/news/herbalife-says-talks-ftc-outcome-231421915.html)

Soapboxmom

03-07-2016, 11:29 PM

Our dear colleague has another fabulous article out:

Herbalife's And Other MLMs' 2015 Data Show Their Growth Era Has Ended - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/3956452-herbalifes-mlms-2015-data-show-growth-era-ended?auth_param=184eqq:1bdrssj:34c2a111aecc05fe1f bb973f871c44ae&uprof=45&dr=1)
Herbalife's And Other MLMs' 2015 Data Show Their Growth Era Has EndedMar. 7, 2016 4:32 PM ET|
About: Herbalife Ltd. (HLF) (http://seekingalpha.com/symbol/HLF), Includes: NUS (http://seekingalpha.com/symbol/NUS), USNA (http://seekingalpha.com/symbol/USNA)

https://staticseekingalpha.a.ssl.fastly.net/images/users_profile/006/879/441/big_pic.png?1357879804 (http://seekingalpha.com/author/robert-fitzpatrick/articles)
Robert FitzPatrick (http://seekingalpha.com/author/robert-fitzpatrick/articles) ⊕Follow (http://seekingalpha.com/article/3956452-herbalifes-mlms-2015-data-show-growth-era-ended?auth_param=184eqq:1bdrssj:34c2a111aecc05fe1f bb973f871c44ae&uprof=45&dr=1#) (235 followers)

Consumer Educator
Send Message (http://seekingalpha.com/article/3956452-herbalifes-mlms-2015-data-show-growth-era-ended?auth_param=184eqq:1bdrssj:34c2a111aecc05fe1f bb973f871c44ae&uprof=45&dr=1#)|
Website(48 clicks) (http://www.falseprofits.com)

SummaryApart from fraud charges, the global performance of Herbalife and other large MLMs shows their era of "growth" is over. The change is not cyclical, but inevitable and irreversible.
Growth in MLM is not real. It relies on new geography. There is no sustained base of brand loyalists or successful salespeople.
For individual recruits, MLM "growth" from recruiting is a requirement. No one profits by personal "direct selling."
While expansion is always promised, data now show contraction, revealing to regulators and investors MLMs inherent flaw and its basis in deception.
Herbalife, Nu Skin and Usana illustrate the reality of saturation. All depend now on China and other new markets, the proverbial "last ones in." China "growth" is ending.

An incredible read. The only way growth will happen for these scams is to go interplanetary!

Soapboxmom

03-08-2016, 02:14 PM

Staying Short Herbalife: The Discount Customer Argument Does Not Hold Water - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/3956355-staying-short-herbalife-discount-customer-argument-hold-water?auth_param=184eqq:1bdrvmk:af6fbe01d466c8632e 6e889a3eac1f3a&uprof=45&dr=1Staying)

Short Herbalife: The Discount Customer Argument Does Not Hold Water

Mar. 7, 2016 10:56 AM ET|
19 comments (http://seekingalpha.com/article/3956355-staying-short-herbalife-discount-customer-argument-hold-water?auth_param=184eqq:1bdrvmk:af6fbe01d466c8632e 6e889a3eac1f3a&uprof=45&dr=1#comments) |
About: Herbalife Ltd. (HLF) (http://seekingalpha.com/symbol/HLF)

https://staticseekingalpha1.a.ssl.fastly.net/images/users_profile/014/179/732/big_pic.png?1434913581 (http://seekingalpha.com/author/connor-davidson/articles)
Connor Davidson (http://seekingalpha.com/author/connor-davidson/articles)
Deep value, value, contrarian, long-term horizon
Send Message (http://seekingalpha.com/article/3956355-staying-short-herbalife-discount-customer-argument-hold-water?auth_param=184eqq:1bdrvmk:af6fbe01d466c8632e 6e889a3eac1f3a&uprof=45&dr=1#)|
Website(2 clicks) (https://twitter.com/Connor_Davidson)

Summary

Herbalife claims that the majority of distributors sign up only for a discount on the products.
The question is who recruited them and why become a discount customer?
An analysis of the compensation plan shows that there is little incentive to recruit discount customers.
Herbalife’s claims do not match up to the compensation statement or previous SEC filings.
The company should implement a “discount customer” program and disclose honestly the numbers participating.
Failed distributors drowning in overpriced, overhyped products and losing their shirts to be exact with lots of wild tales about the motivations for purchases!

Soapboxmom

03-09-2016, 02:17 PM

Bill Ackman Was Right About MBIA And He Is Right About Herbalife: Will The "Contested Complaint" Be Filed Soon? - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/3956984-bill-ackman-right-mbia-right-herbalife-will-contested-complaint-filed-soon?auth_param=184eqq:1be0skv:830f7fa53454ad1bc4f a4cc0630c8ab6&uprof=45&dr=1#alt1)

Bill Ackman Was Right About MBIA And He Is Right About Herbalife: Will The "Contested Complaint" Be Filed Soon?Mar. 9, 2016 1:59 PM ET|
About: Herbalife Ltd. (HLF) (http://seekingalpha.com/symbol/HLF)

https://staticseekingalpha2.a.ssl.fastly.net/images/users_profile/009/813/561/big_pic.png?1444716090 (http://seekingalpha.com/author/eric-moore/articles)
Eric Moore (http://seekingalpha.com/author/eric-moore/articles) ⊕Follow (http://seekingalpha.com/article/3956984-bill-ackman-right-mbia-right-herbalife-will-contested-complaint-filed-soon?auth_param=184eqq:1be0skv:830f7fa53454ad1bc4f a4cc0630c8ab6&uprof=45&dr=1#) (70 followers)

Long/short equity, special situations, value, Relative Value Arbitrage
Send Message (http://seekingalpha.com/article/3956984-bill-ackman-right-mbia-right-herbalife-will-contested-complaint-filed-soon?auth_param=184eqq:1be0skv:830f7fa53454ad1bc4f a4cc0630c8ab6&uprof=45&dr=1#)

SummaryHerbalife executives are making the same failed arguments that JewelWay, Omnitrition, Burnlounge and Vemma made when accused of running a pyramid scheme.
Michael Johnson's own words confirm he is attempting to count distributors as customers.
When compared side by side with previous pyramid prosecutions such as FTC V Vemma, FTC v Burnlounge and Webster v Omnitrition, Herbalife is clearly a pyramid scheme.

In my first article (http://seekingalpha.com/article/3824086-reason-herbalife-will-never-sue-bill-ackman-pershing-square) I addressed the reason why Herbalife will not sue Bill Ackman, but in this article, I decided to ask another question to Herbalife stockholders, that is:
What will happen to Herbalife stock when the FTC refuses to allow Herbalife to continue to count failed distributors as customers?
Herbalife has recently informed us that a "contested complaint" (http://www.reuters.com/article/us-herbalife-probe-ftc-idUSKCN0VY2Y5) may be filed against them, are they preparing shareholders for the inevitable lawsuit and/or injunction because they have reached an impasse with the FTC?.....

Excellent analysis of Herbalife and the issue of trying to label distributors as customers because in reality the vast majority of sales are to folks desperately trying to scrounge money out of the pyramid scheme pay plan.

Soapboxmom

11-02-2016, 11:01 AM

Herbalife Finally Showing Signs Of Cracking - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/4018010-herbalife-finally-showing-signs-cracking?li_source=LI&li_medium=liftigniter-widget)

Summary

In China, sales declined 11.7% between Q2 and Q3 - from $242.5M to $214.2M.
In the U.S., sales declined 9.6% from Q2 to Q3 - from $266.5M to $241M.
Herbalife provided full-year GAAP diluted EPS guidance for FY 2017 of $3.95-4.35.
Based on a 12x multiplier, this implies a fair value of $47.40-52.20 per share - a 12-20% decline from today’s closing price.

Also, I believe it's wiser to compare this quarter's numbers with the previous quarter's, rather than year-over-year numbers in the same period - mainly because of the FTC injunction and the fact that Herbalife is at a turning point, which means it makes less sense to compare YOY numbers than it does to compare successive quarters. Essentially, what I'm looking for are momentum and direction.
https://staticseekingalpha.a.ssl.fastly.net/uploads/2016/11/10455371_14780359539966_rId5.png

Soapboxmom

11-02-2016, 11:06 AM

A lengthy expose that is definitely worth the read!

Herbalife: The Lay-Up - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/4011758-herbalife-lay?auth_param=184eqq:1bvt2j1:a98f348fcf1cea1c7db9 1e288dcb34f7&uprof=45&dr=1#alt2)

SummaryThe recent U-turn of the FTC is much more significant than you think.
Herbalife is much more vulnerable than they let on in their IR and PR.
Carl Icahn truly is hoist on his own petard and he missed the last exit.
The Rest of the World will not take forty years to find out they've been had.
The MLM/pyramid scheme scandal is ten times bigger than the Madoff affair...........

Conclusion
Herbalife is in denial, and their largest investor, Carl Icahn, is completely confused about their business model and thinks the company can make the change and thrive, or if that's not the case, at least he pretends and he plays bluff poker very well, but in all likelihood he has now missed last exit on his highway of doom. The posturing is immaterial. Dumb deals are done all the time, but it is hard to see who he could line up to partner with him in taking Herbalife private, given the atrocious prospects. By the third quarter of 2017 the transition will become fully reflected in the company's financials, but the facts on the ground indicate that the deterioration is setting in, and will be a steady erosion from hereon out. The slide is unstoppable at this point and it is time for Herbalife management as well as their lead investor, to follow the advice from M*A*S*H psychiatrist Maj. Sidney Freedman (https://youtu.be/l87UV5gYa5s): "Ladies and gentlemen, take my advice, just pull down your pants and slide on the ice."

Soapboxmom

11-02-2016, 11:32 AM

There are loads more excellent articles:

For All The Hype About Herbalife's Discount Buyers, We Estimate They Account For Less Than 2% Of U.S. Sales - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/4012477-hype-herbalifes-discount-buyers-estimate-account-less-2-percent-u-s-sales)

Summary

Herbalife has less than a year to show the FTC that the vast majority of its products are sold to people who have no interest in its business opportunity.
To do this Herbalife must prove that legions of people sign up with the company only to buy the product at a discount for personal consumption.
Herbalife’s disclosure regarding so-called Discount Buyers has been self-serving and misleading since the company came under scrutiny.
We estimate the number of current Discount Buyers, based on Herbalife’s disclosures, past and present, and the FTC’s findings, and discover that they account for less than 2% of Herbalife’s US sales.

Herbalife's Qualification Crowd Is In Trouble - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/4012766-herbalifes-qualification-crowd-trouble?auth_param=184eqq:1c0c7f9:4410746362b37948 186db7a9b70fd1b5&uprof=45&dr=1)

Summary

Herbalife has less than a year to prove to the FTC that its US business is based on sales to distributors with Retail Customers who purchase products at prices that generate real profits.
We consider the buying patterns of a small and highly influential group of Herbalife’s top distributors who account for an outsized share of the company’s sales.
We find standing qualification orders, phony accounts, collapsing pyramids of qualification buyers, millions of dollars of products donated to charity and thousands of dollars spent on storage space – all suggesting top distributors lack Retail Customers.
By the way, Herbalife would prefer if you didn’t call these top distributors to ask them about how their businesses operate.

Remember those Herbalife (NYSE:HLF (http://seekingalpha.com/symbol/HLF)) buttons? "Earn What You're Worth." It's time to find out what that really means.

Soapboxmom

11-02-2016, 12:09 PM

A must read with lots of juicy quotes. Herbalife is outright lying to reps and investors!

Herbalife FAQ Ignores FTC And Regulatory Risk - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/4013861-herbalife-faq-ignores-ftc-regulatory-risk?auth_param=184eqq:1c0kd7b:8589a421c5a2cac6fb2 3b821889cd8a8&uprof=45&dr=1#alt1)

Summary

Herbalife released an FAQ aimed at distributors which directly opposes FTC findings.
They continue to push the idea that 73% of members are discount buyers, despite the FTC refuting this.
The FTC settlement is likely to have an adverse affect on Herbalife, which is obfuscated by their public statements.
Herbalife faces great regulatory risk from the settlement which may be underestimated by investors.

As everyone who followed the saga between Herbalife (NYSE:HLF (http://seekingalpha.com/symbol/HLF)) and the FTC will be fully aware, they eventually settled for a $200M fine and certain conditions to be applied to their business model. Despite these required changes to Herbalife's business, they recently released a FAQ (http://www.herbalife.com/Content/en-US/pdf/StrongerThanEver/PressMaterial/FAQ.pdf) document aimed at their distributors. This article will effectively take a look at a side by side of the FTC complaint against Herbalife, as well as the FAQ document they released post-complaint.
The misleading nature of this document is by no means a one-off. Senior management within the company have been consistently misdirecting their investors and distributors and this is just another example of the unacceptable way they blind their supporters from the harsh reality of their circumstance....

And, the winner is...... Amazon!

Shake-O-Nomics: Debunking The Myth Of The Herbalife Discount Only Member - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha (http://seekingalpha.com/article/4015123-shake-o-nomics-debunking-myth-herbalife-discount-member?auth_param=184eqq:1c11gfk:8d14b0fa21b9b568d 68da46953062bd5&uprof=45&dr=1)

SummaryHerbalife claims that 86% of their members join primarily for the 25% discount.
Ackman claims the majority of these discount seeking members are in fact failed distributors.
In many cases it is cheaper to buy from Amazon than to become a Herbalife member with a 25% discount.
The Herbalife member churn rate of 90% means 5.2 million canisters of Formula 1 demand leave the GoHerbalife.com US market each year.
Despite 53% of US households having Amazon Prime the estimated Formula 1 sales on Amazon are a mere 89,000 canisters per year.