Herbalife Ltd. (NYSE:HLF) has dodged bullet after bullet. First Bill Ackman announced a massive short position in December 2012. Then he began to chip away at it, but to no avail, in spite of repeated calls for a regulatory investigation and his latest report, which takes aim at lead generation. Meanwhile other big name investors have dumped money into the company, effectively betting against Ackman and practically daring regulators to launch an official probe.

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Is Herbalife a pyramid scheme?

At issue is whether Herbalife Ltd. (NYSE:HLF) is actually a pyramid scheme. Currently all many investors care about is whether the company is making money, and its financial statements show it is profitable. However, U.S. regulators define an illegal pyramid scheme as one which makes most of its money from distributors recruiting other distributors rather than selling products to third parties outside the company and its distributors.

This question is pretty hard to tell from financial statements alone. Herbalife Ltd. (NYSE:HLF)’s new auditing firm 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.

Herbalife: We’re not a pyramid scheme

Herbalife Ltd. (NYSE:HLF) continues to deny the allegations that it is a pyramid scheme. However, as more and more organizations and lawmakers call for a probe, it’s worth questioning just how long U.S. regulators will avoid investigating. The League of United Latin American Citizens (LULAC) is the latest organization to come forward and demand an investigation. Their demands came on the heels of a call from U.S. Sen. Ed Markey.

The reason they’re pushing for an investigation is because of signs that Herbalife Ltd. (NYSE:HLF) might be victimizing low income people. LULAC revealed that more than 60% of Herbalife distributors are Hispanic, and 88% of Hispanic distributors make nothing from their time as a distributor for the company. 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.

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.”

Herbalife dodges bullets

Herbalife Ltd. (NYSE:HLF) may officially be in hot water in Canada where authorities are said to have begun an official investigation. That report hasn’t been confirmed by other sources, but if Canada really is investigating, then what will it take for the U.S. to follow?

And then there is 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? It would certainly seem as if Herbalife has multiple lives, but of course even if a U.S. investigation is announced, it doesn’t mean that regulators will find anything. There may be nothing to find, as it contends that it operates within the confines of the law.

Just last month, Herbalife Ltd. (NYSE:HLF) dodged yet another bullet as regulators announced charges against some of its competitors. The company’s stock hit a new high as investors seemed even surer that Herbalife was untouchable. The only question now is whether the company will remain so.

DISCLOSURE: I have no position in Herbalife Ltd (NYSE:HLF) or any other company mentioned.