Herbalife Ltd. (NYSE:HLF) is reportedly facing yet another investigation, this time from Illinois Attorney General Lisa Madigan, according to Reuters. At this point, investors seem unfazed by news of a new investigation of Herbalife because as of this writing, shares were little moved. At this point, they may see this news as being just more noise. Another day, another Herbalife investigation.
Madigan urged to probe Herbalife
Civil rights groups in Illinois began pushing Madigan’s office months ago, saying that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme which purposely targets minorities. Bill Ackman has been calling the company a pyramid scheme since late 2012, although Herbalife continues to deny the allegations.
Madigan’s office is just the latest agency to begin an investigation of Herbalife Ltd. (NYSE:HLF). The Federal Trade Commission and New York Attorney General Eric Schneiderman have previously been reported to be investigating. Also the FBI has reportedly been combing through Herbalife’s documents and speaking with some of the company’s former distributors.
The New York Post‘s Michelle Celarier also tweeted just a short time ago that she is “hearing that additional AGs are in the wings.”
Albright concerned about Herbalife connection
Celarier also reported today that Madeline Albright is “freaking out over her role as Herbalife cheerleader.” She cites sources who say she is becoming increasingly concerned about the rising number of investigations of Herbalife Ltd. (NYSE:HLF)’s business model. Albright has been running her own advisory firm since leaving the State Department, and she has been acting as a brand ambassador and also a business consultant to Herbalife.
According to Celarier’s sources, Albright has been having closed-door meetings with Herbalife Ltd. (NYSE:HLF) CEO Michael Johnson to talk strategy. A source said Albright’s relationship with Herbalife is different than that of the new lobbyists and communications firms the controversial company has hired recently. It’s because Albright, along with her business partner James O’Brien, have personally worked as paid advocates for Herbalife.
Albright helps Herbalife expand abroad
The former U.S. Secretary of State has reportedly used her own influence to pave the way for Herbalife Ltd. (NYSE:HLF) to expand internationally. Sources told the Post that she was especially helpful in getting the company’s licenses in China and that she has been a speaker at some of the company’s “extravaganzas,” where she praises Herbalife, its products and the opportunities it provides to distributors.
The sources also say that Albright is especially worried about Schneiderman’s investigation. New York has especially tough language against pyramid schemes in its Martin Act, which means he can press criminal charges in addition to civil ones. For now though, Albright’s firm continues to express confidence in Herbalife Ltd. (NYSE:HLF).