The Securities and Exchange Commission’s letter to Sen. Ed Markey regarding Herbalife Ltd. (NYSE:HLF) is pretty scant on answers. Regulators basically said that they don’t disclose information about whether they have investigated or are currently investigating a company on suspicions of being a pyramid scheme. Then they go into the guidelines for what a pyramid scheme is, which officials have already provided online in other places.

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Herbalife questions left unanswered

In his letter, Markey called attention to how Herbalife Ltd. (NYSE:HLF) management’s questions regarding the number of sales which are outside their network have changed. The SEC again reiterated his position of not disclosing any past or current investigations into companies and said it was unable to comment on Herbalife.

The senator also asked questions like, “How many compensation system levels does the typical pyramid scheme have.” He also asked, “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 pyramid scheme?” He also wanted to know, “What if the turnover rate was in excess of 10%? What if it was in excess of 50%?”

Regulators also said they don’t “maintain specific data regarding the typical number of compensation levels or turnover rates at either MLM companies or pyramid schemes.” So basically, the SEC said there are no guidelines in place in terms of when turnover rates are high enough to signal concerns that the company in question is a pyramid scheme.

Needless to say, the U.S. Federal Trade Commission’s response to Sen. Markey earlier this month was a bit fuller in terms of answers. The agency’s chairperson told him that she’s considering taking action against Herbalife Ltd. (NYSE:HLF).

Is Herbalife a pyramid scheme?

This certainly seems like the million dollar question. Shares of Herbalife Ltd. (NYSE:HLF) have climbed higher and higher as the company has returned better and better results. Carl Icahn recently increased his position in Herbalife to 17 million shares.

Activist investor Bill Ackman, who famously began shorting the nutritional supplements company in late 2012, has tried to chip away at the company’s reputation. His latest tactics have involved spotlighting various Herbalife Ltd. (NYSE:HLF) distributors and even a board member. Possibly because of his first spotlight, Canadian regulators decided to investigate because he highlighted a group which had faced regulatory action in the past regarding sales of leads.