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Herbalife Nutrition Ltd., also called Herbalife International, Inc. (with a U.S. subsidiary called Herbalife International of America) or simply Herbalife, is a global
multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
(MLM) corporation that develops and sells
dietary supplements A dietary supplement is a manufactured product intended to supplement one's diet by taking a pill (pharmacy), pill, capsule (pharmacy), capsule, tablet (pharmacy), tablet, powder, or liquid. A supplement can provide nutrients either extr ...
. The company was founded by
Mark R. Hughes Mark R. Hughes (January 1, 1956 – May 21, 2000) was an American entrepreneur who was the founder, chairman, and CEO of Herbalife International Ltd, a multi-level marketing company. Early life Hughes was born in La Mirada, California on J ...
in 1980, and it employs an estimated 9,900 people worldwide. The business is incorporated in the
Cayman Islands The Cayman Islands () is a self-governing British Overseas Territory—the largest by population in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located to the ...
, with its corporate headquarters located in
Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...
,
California California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
. The company operates in 95 countries through a network of approximately 4.5 million independent distributors and members. In October 2022, previous CEO Michael O. Johnson was appointed as Chairman and interim Chief Executive Officer following the departure of
John Agwunobi John O. Agwunobi is a Scottish-born Nigerian-American former public health official, pediatrician, and the current chief executive officer and former executive chairman of Herbalife Nutrition. He was formerly senior vice-president of Walmart and p ...
. The company has been criticized for allegedly operating a "sophisticated
pyramid scheme A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
". Herbalife agreed to "fundamentally restructure" its business, in the US but not worldwide, and pay a $200 million fine as part of a 2016 settlement with the
U.S. Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction o ...
(FTC) following these accusations.


History

In February 1980, Mark R. Hughes began selling the original Herbalife weight management product from the trunk of his car. Hughes often stated that the genesis of his product and program stemmed from the weight loss concerns of his mother Joanne whose premature death he attributed to an eating disorder and an unhealthy approach to weight loss. His first product was a protein shake designed to help people manage their weight. He structured his company using a
direct-selling Direct selling consists of single-level marketing (in which a direct seller makes money by buying products from a parent organization and selling them directly to customers) and multi-level marketing (in which the direct seller may earn money f ...
,
multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
model. In 1982, Herbalife received complaints from the
Food and Drug Administration The United States Food and Drug Administration (FDA or US FDA) is a List of United States federal agencies, federal agency of the United States Department of Health and Human Services, Department of Health and Human Services. The FDA is respon ...
for claims made about certain products and the inclusion of
mandrake A mandrake is the root of a plant, historically derived either from plants of the genus '' Mandragora'' found in the Mediterranean region, or from other species, such as ''Bryonia alba'', the English mandrake, which have similar properties. The ...
,
poke root ''Phytolacca americana'', also known as American pokeweed, pokeweed, poke sallet, dragonberries, and inkberry, is a poisonous, herbaceous perennial plant in the pokeweed family Phytolaccaceae. This pokeweed grows . It has simple leaves on green ...
, and food-grade
linseed oil Linseed oil, also known as flaxseed oil or flax oil (in its edible form), is a colourless to yellowish oil obtained from the dried, ripened seeds of the flax plant (''Linum usitatissimum''). The oil is obtained by pressing, sometimes followed by ...
in another. The Department of Justice of Canada filed criminal charges against the company in November 1984 for misleading medical claims in advertisements. As a result of the complaints, the company modified its product claims and reformulated the product. By 1985, the company was considered the fastest-growing private company in America by '' Inc.'' after its sales increased from $386 thousand to $423 million over the previous five years. That same year, the
California Attorney General The attorney general of California is the state attorney general of the Government of California. The officer's duty is to ensure that "the laws of the state are uniformly and adequately enforced" (Constitution of California, Article V, Section ...
sued the company for making inflated claims about the efficacy of its products. The company suffered as a result of the lawsuit and was forced to lay off nearly 800 employees by May 1985. The company settled the suit for $850,000 without admitting wrongdoing. In 1986, Herbalife became a publicly-traded company on the
NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
and rebranded itself as Herbalife International. However, as a result of the negative publicity from the FDA lawsuit, the company posted a $3 million loss that year. By 1988, the company had expanded its reach to Japan, Spain, New Zealand, Israel, and Mexico and increased its worldwide sales to $191 million in 1991. In 1993, the company underwent a secondary offering of five million shares. The company launched a line of personal care products in 1995 which included fragrances and facial cleansing products. The company was sued in civil court by two former distributors in 1997 for withholding earned income. In 1999, Hughes attempted to take the company private after asserting that Wall Street was undervaluing the company. While the board approved the buyout offer, shareholders of the company filed a suit against the firm because they believed the share price they were offered was unfair. Hughes eventually abandoned his attempt to buy the company and settled the suit with shareholders. On May 20, 2000, Mark Hughes died at age 44. Following his death, the company was led by Christopher Pair until October 2001.


J.H. Whitney & Company and Golden Gate Capital

In 2002, the company was acquired for US$685 million by J.H. Whitney & Company and
Golden Gate Capital Golden Gate Capital is an American private equity firm based in San Francisco. The firm makes investments in a number of select industries, including technology, financial services, retail and industrial, through leveraged buyout transactions, as ...
. Concurrently, plant sources of
ephedrine Ephedrine is a central nervous system (CNS) stimulant that is often used to prevent low blood pressure during anesthesia. It has also been used for asthma, narcolepsy, and obesity but is not the preferred treatment. It is of unclear benefit in ...
were removed from Herbalife products in 2002 after several U.S. states banned supplements containing such herbs. In April 2003, Michael O. Johnson joined Herbalife as CEO following a 17-year career with
The Walt Disney Company The Walt Disney Company, commonly known as Disney (), is an American multinational mass media and entertainment conglomerate headquartered at the Walt Disney Studios complex in Burbank, California. Disney was originally founded on October ...
. On December 16, 2004, the company had an initial public offering on the
NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is by far the List of stock exchanges, world's largest s ...
of 14.5 million common shares at $14 per share, netting the owners $1.3 billion. In the mid 2000s, Herbalife upgraded its manufacturing facilities, moving manufacturing to around 60% in-house, and changed how the company sold its products to distributors. On May 7, 2014, the company announced that it entered into a deal with Bank of America Merrill Lynch to repurchase $266 million of its stock. In July 2016, Herbalife agreed to change its business model and pay $200 million to its distributors in a settlement with the FTC. The company announced in November 2016 that Chief Operating Officer Richard Goudis would take over the position of CEO in June 2017 and Johnson would transition to executive chairman. In August 2017, the company announced that it would repurchase up to $600 million of its stock. On April 25, 2018, Herbalife announced that it had changed its name from Herbalife Ltd. to Herbalife Nutrition Ltd. The company also announced that its shareholders had approved a two-for-one stock split. In January 2019, Herbalife announced that it was replacing Goudis after learning of comments he had made before taking over as CEO that was “contrary to the company’s expense-related policies and business practices” and inconsistent with the company's standards and culture.” Former CEO Johnson subsequently took over the role on an interim basis. In March 2020, John Agwunobi was named as its next chief executive. Agwunobi departed Herbalife Nutrition in October 2022 and Michael O. Johnson was named Chairman and interim Chief Executive Officer.


Products

Herbalife Nutrition's products include weight-loss and protein shakes, as well as protein bars, teas, aloes, vitamins, and sports hydration, energy, and personal care products. The company's original product is the Formula 1 protein shake, a soy-based meal-replacement shake. The product debuted in 1980 and, as of 2015, was the company's best selling product accounting for nearly 30% of total sales. Herbalife's products are produced at the company's five manufacturing facilities in the U.S. and China, as well as by third-party manufacturing partners. The company's production process is based on a 'seed to feed' strategy, which the company initiated in the 2010s that allows it to trace where the ingredients in its nutritional products originated. Since 2013, the company has operated a botanical extraction facility in
Changsha Changsha (; ; ; Changshanese pronunciation: (), Standard Mandarin pronunciation: ) is the capital and the largest city of Hunan Province of China. Changsha is the 17th most populous city in China with a population of over 10 million, an ...
,
Hunan Province Hunan (, ; ) is a landlocked province of the People's Republic of China, part of the South Central China region. Located in the middle reaches of the Yangtze watershed, it borders the province-level divisions of Hubei to the north, Jiangxi t ...
, China. The facility produces botanical extracts, including
tea Tea is an aromatic beverage prepared by pouring hot or boiling water over cured or fresh leaves of ''Camellia sinensis'', an evergreen shrub native to East Asia which probably originated in the borderlands of southwestern China and north ...
s,
guarana Guaraná ( from the Portuguese ''guaraná'' ), ''Paullinia cupana'', syns. ''P. crysan, P. sorbilis'') is a climbing plant in the family Sapindaceae, native to the Amazon basin and especially common in Brazil. Guaraná has large leaves and cl ...
,
chamomile Chamomile (American English) or camomile (British English; see spelling differences) ( or ) is the common name for several plants of the family Asteraceae. Two of the species, ''Matricaria recutita'' and ''Anthemis nobilis'', are commonly us ...
,
broccoli Broccoli (''Brassica oleracea'' var. ''italica'') is an edible green plant in the cabbage family (family Brassicaceae, genus ''Brassica'') whose large flowering head, stalk and small associated leaves are eaten as a vegetable. Broccoli is cl ...
, and
bilberry Bilberries (), or sometimes European blueberries, are a primarily Eurasian species of low-growing shrubs in the genus ''Vaccinium'' (family Ericaceae), bearing edible, dark blue berries. The species most often referred to is ''Vaccinium myrtillus ...
, for use in many of the company's products. Before extracts are processed, they undergo a botanical identification program and are tested several times throughout the production process. The processed raw materials from the extraction facility are used at all of the company's branded manufacturing facilities as well as by its partners. As of 2015, 58 percent of the company's nutrition products were manufactured at Herbalife-owned facilities. In China, the company's manufacturing sites are located in
Suzhou Suzhou (; ; Suzhounese: ''sou¹ tseu¹'' , Mandarin: ), alternately romanized as Soochow, is a major city in southern Jiangsu province, East China. Suzhou is the largest city in Jiangsu, and a major economic center and focal point of trade ...
and
Nanjing Nanjing (; , Mandarin pronunciation: ), alternately romanized as Nanking, is the capital of Jiangsu province of the People's Republic of China. It is a sub-provincial city, a megacity, and the second largest city in the East China region. T ...
. In the U.S., the company has manufacturing facilities in
Lake Forest, California Lake Forest is a city in Orange County, California. The population was 85,858 at the 2020 census. Lake Forest incorporated as a city on December 20, 1991. Prior to incorporation, the community had been known as El Toro. Following a vote in 20 ...
and
Winston-Salem, North Carolina Winston-Salem is a city and the county seat of Forsyth County, North Carolina, United States. In the 2020 census, the population was 249,545, making it the second-largest municipality in the Piedmont Triad region, the 5th most populous city in N ...
. Herbalife's claims of health benefits from its products have met scrutiny from the medical community, consumers, and government agencies. In 2008, Herbalife was sued after laboratory tests indicated that levels of lead in several Herbalife products were in excess of California state law and could lead to liver problems over an extended period of time. The company commissioned its own lab testing and found that those products did not contain high enough amounts of lead to require special labeling.


Business model

Herbalife Nutrition is a
multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
company. A 2010 article in the ''
Los Angeles Business Journal The ''Los Angeles Business Journal'', established in 1979, is a weekly newspaper and online news source in Los Angeles, California, which provides coverage of local business news. According to the ''Journals website, it has a weekly print circul ...
'' claimed that Herbalife Nutrition was one of the most profitable companies in Los Angeles County and directly benefited from its business model. As a result of the 2016 FTC settlement, the company is required to prove that at least 80 percent of its sales are made to individuals outside of its distributor network. Distributors are responsible for providing receipts for sales and proving they have legitimate customers. The settlement also required that distributors are only able to earn one-third of their rewards based on recruitment. In the U.S., the company now differentiates between individuals who join as a member to buy discounted products and those who join as a distributor seeking a business opportunity. Discount buyers are unable to earn rewards or sell products. Herbalife Nutrition is also required to have its practices monitored by an outside party for seven years to ensure compliance. In the past, company management considered the number and retention of distributors a key parameter and tracked it closely in financial reports. By January of each year, sales leaders are required to requalify. In February of each year, individuals who did not satisfy the sales leader qualification requirements during the preceding 12 months are removed from that rank. For the latest 12-month requalification period ending January 2019, approximately 67.9 percent of the eligible sales leaders requalified. In a California class action suit (''Minton v. Herbalife International, et al.'') filed on February 17, 2005, the plaintiff challenged "the marketing practices of certain Herbalife International independent distributors under various state laws". In a West Virginia class action suit (''Mey v. Herbalife International, Inc., et al.'') filed on July 16, 2003, the plaintiffs alleged that some of Herbalife International's distributors used pre-recorded telephone messages and autodialers to contact prospective customers in violation of the Telephone Consumer Protection Act. The case was resolved with Herbalife and its distributors paying $7 million into a fund for class members part of the suit.


Liver disease inquiries

Hospitals in Israel, Spain, Switzerland, Iceland, Argentina, and the United States have reported liver damage in a number of patients who used Herbalife products. In 2004, Israel's Health Minister began an investigation into Herbalife's products after four persons using Herbalife's products were found to have liver problems. The company was accused of selling products containing toxic ingredients such as
quaqua The genus ''Quaqua'' falls within the tribe of plants known collectively as stapeliads. All stapeliads, including ''Quaqua'', are Old World stem succulents. Species of the genus ''Quaqua'' are exceptionally varied and endemic to southwestern ...
,
comfrey ''Symphytum'' is a genus of flowering plants in the borage family, Boraginaceae, known by the common name comfrey (pronounced ). There are 59 recognized species.WFO (2022): Symphytum L. Published on the Internet; http://www.worldfloraonline.org/ ...
, and kraska. The products were sent to Bio-Medical Research Design LTD (B.R.D), to a private U.S. laboratory, and to Israel's Forensic research laboratory. A study of the cases funded by the Israeli Ministry of Health concluded that there was a causative relationship. Herbalife's SEC 10-Q filings stated that the Israeli Ministry of Health did not establish a causal relationship between the product and liver ailments. In 2009, an Israeli woman sued Herbalife International and Herbalife Israel, claiming that her liver damage resulted from the use of Herbalife products. Scientific studies in 2007 by doctors at the University Hospital of Bern in Switzerland and the Liver Unit of the Hadassah-Hebrew University Medical Center in Israel found an association between consumption of Herbalife products and
hepatitis Hepatitis is inflammation of the liver tissue. Some people or animals with hepatitis have no symptoms, whereas others develop yellow discoloration of the skin and whites of the eyes (jaundice), poor appetite, vomiting, tiredness, abdominal pa ...
. In response, the Spanish Ministry of Health issued an alert asking for caution in consuming Herbalife products. Herbalife stated they were cooperating fully with Spanish authorities, and after investigation, the agency determined no action was required and removed the alert. In January 2009, the Scientific Committee of the Spanish Agency for Food Safety and Nutrition (AESAN) reached the same conclusion. After reviewing cases implicating Herbalife products in Spain, Switzerland, Israel, Finland, France, Italy, Iceland and Portugal, the 12-member scientific panel issued a report concluding: "The analyses of these cases and information regarding their circumstances have not allowed us to establish a causal relationship" between liver anomalies and Herbalife's dietary supplements. The panel attributed the cases to metabolic changes from overzealous and unsupervised dieting. However, neither a 2005 American Association for the Study of the Liver position paper on the management of acute liver failure nor a 2013 review in the New England Journal of Medicine lists "overzealous dieting" among the recognized causes of acute liver failure. A July 2013 peer-reviewed study published in the ''World Journal of Hepatology'' reexamined known cases of
hepatotoxicity Hepatotoxicity (from ''hepatic toxicity'') implies chemical-driven liver damage. Drug-induced liver injury is a cause of acute and chronic liver disease caused specifically by medications and the most common reason for a drug to be withdrawn fro ...
that had previously been linked to consumption of Herbalife products and concluded that using "the liver specific Council for International Organizations of Medical Sciences scale, causality was probable in 1 case, unlikely and excluded in the other cases. Thus, causality levels were much lower than hitherto proposed." In a separate review published less than a year earlier, the same author described the relationship between Herbalife products and reported hepatotoxicity cases as "highly probable". Interestingly, race, genetics, age, and sex are all potential risk factors that may predispose individuals to Herbalife side effects In December 2020, a 2019 paper analysing Herbalife's slimming products' association with one patient's fatal acute liver failure was retracted by the ''Journal of Clinical and Experimental Hepatology''. According to a co-author of the paper, this was done after threats of legal action by a Delhi-based law firm.


Pyramid scheme allegations

Critics of the company's structure have contended that it has operated as a pyramid scheme. They have also argued that the company does not sufficiently work to curb abuses by individual distributors, though Herbalife Nutrition has consistently denied the allegations. A 2004 settlement resolved a class-action suit on behalf of 8,700 former and current distributors who accused the company and distributors of "essentially running a pyramid scheme." A total of $6 million was to be paid out, with defendants not admitting guilt. In November 2011, the Commercial Court in
Brussels Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
,
Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
ruled that Herbalife was an illegal pyramid scheme. The company filed an appeal on March 8, 2012. On December 3, 2013, a Belgian appeals court found for Herbalife, reversing the lower court's finding. On May 1, 2012, a
short Short may refer to: Places * Short (crater), a lunar impact crater on the near side of the Moon * Short, Mississippi, an unincorporated community * Short, Oklahoma, a census-designated place People * Short (surname) * List of people known as ...
seller, David Einhorn, asked questions about the company's business and sales models during the Q1 earnings call, setting off suspicions that Einhorn had a short position. These suspicions were proved correct in January 2013 when at an investor meeting Einhorn revealed that he had profited through a short position against the company. Einhorn said the short had been closed before the end of 2012.


Bill Ackman

On December 20, 2012,
Bill Ackman William Albert Ackman (born May 11, 1966) is an American billionaire investor and hedge fund manager. He is the founder and CEO of Pershing Square Capital Management, a hedge fund management company. His investment approach makes him an activis ...
(of Pershing Square Capital) presented a series of arguments outlining why his firm believed that Herbalife operated a "sophisticated pyramid scheme" and contended that its stock would hit zero. Ackman alleged after a year-long investigation that the majority of distributors lose money, that the chance of making the testimonial-implied headline income is approximately one in five thousand, and that the company materially overstates its distributors' retail sales and understates their recruiting rewards. According to a number of financial commentators, Ackman bet roughly $1 billion against the company; soon after remarks to the press, the price of the stock decreased such that Ackman would have made $300 million if he had closed his short position then.Felix Salmon
"What's Ackman's Herbalife game?"
Reuters Blogs, December 31, 2012
In March 2015, federal prosecutors and the FBI revealed that they were investigating whether or not individuals paid by Ackman and otherwise had made false statements about Herbalife's business model to regulators and others in order to lower the company's stock price and influence authorities to conduct an investigation. In November 2017, Ackman closed out his short position after Herbalife shares increased by 51 percent over the year, and replaced it with a less aggressive
put option In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the ''underlying''), at a specified price (the ''strike''), by (or at) a s ...
. In March 2018, ''
The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' reported that Ackman had "largely exited" his bet against the company, while others reported that the bet against Herbalife had cost his company hundreds of millions of dollars and damaged the confidence of investors in his hedge fund.


FTC investigation

Based on information from a
Freedom of Information Act Freedom of Information Act may refer to the following legislations in different jurisdictions which mandate the national government to disclose certain data to the general public upon request: * Freedom of Information Act 1982, the Australian act * ...
(FOIA) request, the ''
New York Post The ''New York Post'' (''NY Post'') is a conservative daily tabloid newspaper published in New York City. The ''Post'' also operates NYPost.com, the celebrity gossip site PageSix.com, and the entertainment site Decider.com. It was established ...
'' reported on February 4, 2013, that Herbalife was subject to a pending probe from the
Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
(FTC). The FTC released 729 pages containing 192 complaints received over a 7-year period in regards to the ''New York Posts FOIA request. The FTC stated that the wording it used in its response to the FOIA request was incorrect; the FTC could not confirm or deny an investigation into Herbalife. In March 2014, the FTC opened an investigation into Herbalife in response to calls from consumer groups and members in both houses of Congress. Herbalife responded to the probe by saying it "welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC. We are confident that Herbalife is in compliance with all applicable laws and regulations." However, in the press conference, Herbalife was declared not necessarily not pyramid scheme. In July 2016, Herbalife agreed to change its business model and pay $200 million in a settlement with the FTC. Partial refund checks were mailed to roughly 350,000 Herbalife distributors in January 2017. The FTC said in a press release about the settlement "it's virtually impossible to make money selling Herbalife products." The lawsuit alleged that Herbalife deceived consumers into believing they could earn substantial income from the business opportunity or big money from the retail sale of the company's products. In addition, the complaint charged that one of the fundamental principles of Herbalife's business model—incentivizing distributors to buy products and to recruit others to join and buy products so they could advance in the company's marketing program, rather than in response to actual consumer demand—is an unfair practice in violation of the FTC Act. The company remains under investigation as of early 2019 both by the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
and the
U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
(SEC) for corruption in China. On September 27, 2019, the SEC announced that Herbalife has agreed to pay $20 million to settle charges of making false and misleading statements about its business model and operations in China between 2012 and 2018. The company did not admit or deny the charges but agreed to the settlement terms.


U.S. Justice Department investigation of bribery in China

In 2019, the
U.S. Justice Department The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United States ...
charged two of Herbalife's employees with conspiracy in violation of the
Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests. The FCPA is applicable world ...
(FCPA). They were accused of bribing Chinese officials in order to procure sales permits and to influence an investigation into Herbalife. They were also accused of offering bribes to
China Economic Net China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
in order to influence their media coverage. In response, Herbalife committed $40 million to resolve the issues, and began negotiations with both the US Justice Department and SEC. In August 2020, Herbalife agreed to pay $123 million to the US Department of Justice and the
U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
.


Sports sponsorships

Herbalife Nutrition has sponsored France's national volleyball team and the
Major League Soccer Major League Soccer (MLS) is a men's professional soccer league sanctioned by the United States Soccer Federation, which represents the sport's highest level in the United States. The league comprises 29 teams—26 in the U.S. and 3 in Canada ...
club
LA Galaxy LA Galaxy, also known as the Los Angeles Galaxy, are an American professional soccer club based in the Los Angeles metropolitan area. The Galaxy competes in Major League Soccer (MLS), as a member of the Western Conference. The club began pl ...
since 2007 and has sponsored
Cristiano Ronaldo Cristiano Ronaldo dos Santos Aveiro (; born 5 February 1985) is a Portuguese professional footballer who plays as a forward and captains the Portugal national team. He is currently a free agent. Widely regarded as one of the greatest p ...
since 2013. They sponsored
FC Barcelona Futbol Club Barcelona (), commonly referred to as Barcelona and colloquially known as Barça (), is a professional football club based in Barcelona, Catalonia, Spain, that competes in La Liga, the top flight of Spanish football. Founded ...
and
Lionel Messi Lionel Andrés Messi (; born 24 June 1987), also known as Leo Messi, is an Argentine professional footballer who plays as a forward for club Paris Saint-Germain and captains the Argentina national team. Widely regarded as one of the ...
between 2010 and 2013. Herbalife has also sponsored the basketball club Herbalife Gran Canaria since 2012. In July 2020, Herbalife also sponsored the
Guangzhou Charge Guangzhou Charge () is a Chinese professional ''Overwatch'' esports team based in Guangzhou, Guangdong. The Charge compete in the Overwatch League (OWL) as a member of the league's East region. Founded in 2018, Guangzhou Charge began play as on ...
of the
Overwatch League The Overwatch League (OWL) is a professional esports league for the video game ''Overwatch'', produced by its developer, Blizzard Entertainment. The Overwatch League follows the model of other traditional North American professional sporting lea ...
. In addition to these team and player sponsorships, Turkish Women's Basketball Super League has been named 'Herbalife Nutrition Women's Basketball Super League' for three years starting the 2019-2020 regular season. In 2021, the company announced a partnership with the LA Galaxy on an
augmented reality Augmented reality (AR) is an interactive experience that combines the real world and computer-generated content. The content can span multiple sensory modalities, including visual, auditory, haptic, somatosensory and olfactory. AR can be de ...
fan experience. It also has a multi-year sponsorship with
Jonathan Dos Santos Jonathan dos Santos Ramírez (; ; born 26 April 1990) is a Mexican professional footballer who plays as a defensive midfielder for Liga MX club América. Early life Born in Monterrey, Mexico, Jonathan was competing along with his brother Gi ...
of the LA Galaxy. During the
2020 Summer Olympics The , officially the and also known as , was an international multi-sport event held from 23 July to 8 August 2021 in Tokyo, Japan, with some preliminary events that began on 21 July. Tokyo was selected as the host city during the ...
, Herbalife Nutrition was a sponsor of the
Olympic Committee of Israel The Olympic Committee of Israel (Hebrew: הוועד האולימפי בישראל) is the recognized National Olympic Committee (NOC) of Israel, and the governing body of Olympic sports in Israel. The OCI's headquarters is located at the Natio ...
and the
Indian Olympic Association The Indian Olympic Association (IOA) or Indian Olympic Committee (IOC) is the body responsible for selecting athletes to represent India at the Olympic Games, Asian Games and other international athletic meets and for managing the Indian teams ...
.


Media

In April 2016, a documentary directed by
Ted Braun Theodore Braun is an American film director and screenwriter best known for his Image Award-winning documentary film '' Darfur Now''. He is also an associate professor in the University of Southern California's School of Cinematic Arts' Writin ...
, titled ''
Betting on Zero ''Betting on Zero'' is a 2016 American documentary directed by Ted Braun. It investigates the allegation that Herbalife is a pyramid scheme, and follows Bill Ackman's short investment in Herbalife, which is ostensibly a billion-dollar bet that ...
'', premiered at the
Tribeca Film Festival The Tribeca Festival is an annual film festival organized by TriBeCa Productions, Tribeca Productions. It takes place each spring in New York City, showcasing a diverse selection of film, episodic, talks, music, games, art, and immersive progra ...
. It explored the allegation from Bill Ackman that Herbalife was a pyramid scheme and personal stories of its distributors who lost their life savings.
Hilary Rosen Hilary Rosen (born 1958) is the former head of the Recording Industry Association of America (RIAA). She was a columnist for ''The Washington Post'', became the first Washington editor-at-large and political director of ''The Huffington Post'', ...
, a Democratic lobbyist and an adviser to Herbalife, questioned Tribeca's credibility after claiming that the film was "bought and paid" for by Ackman "to make good on his stock bet". In 2016, a ''
Last Week Tonight with John Oliver ''Last Week Tonight with John Oliver'' (often abridged as ''Last Week Tonight'') is an American late-night talk and news satire television program hosted by comedian John Oliver. The half-hour-long show premiered in April 2014 on HBO. ''Last Wee ...
'' segment on multi-level marketing focused on Herbalife; it strongly condemned the company for its structure resembling a pyramid scheme and cited the FTC report, which implied the company had been operating illegitimately. Oliver criticized Herbalife for its exploitation of
Latino Latino or Latinos most often refers to: * Latino (demonym), a term used in the United States for people with cultural ties to Latin America * Hispanic and Latino Americans in the United States * The people or cultures of Latin America; ** Latin A ...
communities, and overstatement of its products' health benefits. One reviewer wrote that it appeared to be largely based on ''Betting on Zero'', and caused no immediate change in Herbalife's stock prices. The 2018 book ''When The Wolves Bite: Two Billionaires, One Company, and an Epic Wall Street Battle'' by Scott Wapner discusses Ackman's short of the company and his battle with Icahn. In the book, Wapner characterizes Ackman's decision to bet against Herbalife as dangerous, because it anticipated that the government would shut Herbalife down.


References


External links


Official website

Company profile by MarketWatch
{{Authority control Companies listed on the New York Stock Exchange Multi-level marketing companies Retail companies established in 1980 Nutritional supplement companies of the United States Pyramid and Ponzi schemes Companies based in Los Angeles 1980 establishments in California 1980s initial public offerings