Herbalife Ltd. (NYSE:HLF) confirmed that it received the letter from Democratic Senator Edward Markey of Massachusetts who raised questions regarding the business practices of the multilevel marketing company (MLF) that sells nutritional and weight loss products.
In a e-mailed statement to the Wall Street Journal, Barb Henderson, senior vice president of corporate communications of Herbalife Ltd. (NYSE:HLF) said, “We received the letter from Senator Markey this morning and look forward to an opportunity to introduce the company to him and address his concerns at his earliest convenience.”
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Pyramid scheme allegations
In his letter to Michael Johnson, CEO of Herbalife Ltd. (NYSE:HLF), Sen. Markey requested information regarding the company and his domestic subsidiary. He also emphasized that there have been suggestions that Herbalife is not organized as a multilevel marketing company, but a pyramid scheme based on its operations.
According to Sen. Markey, there have been reports in Massachusetts suggesting that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme. He mentioned several reports from entities such as one family in Norton, MA who reported that they lost $130,000 including their 401(K) from investing in the company, causing them significant stress.
The senator emphasized that such allegations have been repeated by other groups such as the Hispanic Federation led by Jose Calderon who expressed concern whether Herbalife distributors are making money selling products or recruiting others to sell products.
Sen. Markey pointed out that he “take no position in the merits of the allegations” against Herbalife Ltd. (NYSE:HLF), but he requested the company answer questions about its business practices and its impact to his constituents in Massachusetts.
Senator calls for inquiry
Sen. Markey also sent letters to the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC) urging the agencies to investigate the business practices of Herbalife Ltd. (NYSE:HLF).
In a statement to The Hill, Sen. Markey said, “There is nothing nutritional about possible pyramid schemes that promise financial benefit but result in economic ruin for vulnerable families. Herbalife may be a purveyor of health and wellness products, but some of its distributors are suffering serious economic ill-health as a result of their involvement in the company.”
Updated on
I’m sure Herbalife and its 3m global distributors and 6m
customers welcome any investigation considering that the SEC has already
approved Herbalife and found no wrong at all in their trading policies.
Senator Markey needs first to distance himself from Bill
Ackman and have no involvement with him at all if he is to maintain his
credibility, independency and reputation in this matter, as it stands it
appears to all that he and Ackman are working from the same agenda.
Distributors with Herbalife can return products under the
current 30 day rule so any distributor who is not sure they have made the
correct decision has a full money back guarantee therefore has minimal loses if
any. A company with a $6.5b turnover
operating for 30 years in 90 global markets cannot be regarded as anything but credible
and successful.
Several of the world’s leading investors have recently taken
large shareholdings in Herbalife such is their support and belief in the
company.
From reports in the global press Ackman has already lost in excess of $800m of his ill
thought bet against Herbalifes business structure and policies and is destined
to lose substantially more or perhaps this should read that he has bet and lost
$800m of his investors hard earned money. A comment from them in the national
press! Now that would be interesting reading………
Down 17lbs since Nov. so yes, it does.
Sen.Markey is to Bill Ackman as Sen Brewster was to Juan Trippe. Bought. And. Paid. For.
Rene may not be aware the truth of MLM scams such as Herbalife is becoming known, and are not going to be around very much longer.
But does it work?
Senator Markey may not be aware of Herbalife’s excellent product return policy. Anyone who wants to return products can do so – up to a year from purchased date. For whatever reason anyone can return products back to HLF for a full refund. I’m 20 years with HLF and my monthly inventory does not exceed $5,000 of which gets sold to end users. IMO, no can lose an investment $130k with HLF – just totally unbelievable.
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