Herbalife last got into trouble in 2015, when the Federal Trade Commission fined it $200 million to settle charges that it engaged in deceptive business practices.
2014 Bloomberg Finance LPTopline: Herbalife Nutrition Ltd. will pay $20 million to settle charges that it misled investors about its China operation, the Securities and Exchange Commission (SEC) announced Friday.
Crucial quote: “Herbalife deprived investors of valuable information necessary to evaluate risk and make informed investment decisions. When making disclosures to investors, issuers must ensure that those disclosures are accurate,” said SEC director Marc P. Berger in a statement.
Key background: Herbalife operates in over 90 countries. The company last got into trouble in 2015, when the Federal Trade Commission fined it $200 million to settle charges that it engaged in deceptive business practices. Like in other MLMs, people sign up with Herbalife to become distributors and sell their shake mixes, nutritional supplements and other wellness products. In order to make more money in an MLM, distributors are typically required to recruit more people into the business. Once they’ve recruited people, distributors are entitled to a cut of their sales.
Tangent: Last Week Tonight with John Oliver produced a segment on why achieving success in an MLM is so hard. And a Netflix documentary, Betting on Zero, followed billionaire investor Bill Ackman while he famously (and unsuccessfully) shorted Herbalife $1 billion.
">Topline: Herbalife Nutrition Ltd. will pay $20 million to settle charges that it misled investors about its China operation, the Securities and Exchange Commission (SEC) announced Friday.
Crucial quote: “Herbalife deprived investors of valuable information necessary to evaluate risk and make informed investment decisions. When making disclosures to investors, issuers must ensure that those disclosures are accurate,” said SEC director Marc P. Berger in a statement.
Key background: Herbalife operates in over 90 countries. The company last got into trouble in 2015, when the Federal Trade Commission fined it $200 million to settle charges that it engaged in deceptive business practices. Like in other MLMs, people sign up with Herbalife to become distributors and sell their shake mixes, nutritional supplements and other wellness products. In order to make more money in an MLM, distributors are typically required to recruit more people into the business. Once they’ve recruited people, distributors are entitled to a cut of their sales.
Tangent: Last Week Tonight with John Oliver produced a segment on why achieving success in an MLM is so hard. And a Netflix documentary, Betting on Zero, followed billionaire investor Bill Ackman while he famously (and unsuccessfully) shorted Herbalife $1 billion.