Herbalife Ltd. (HLF) Opponents Fire Two More Shots

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Herbalife Ltd. (NYSE:HLF) shares climbed by as much as 4% today after a new report from bullish analyst Tim Ramey on Monday. However, opponents continue trying to chip away at the company’s credibility. It’s been a while since Bill Ackman published a report on one of the company’s distributors, but he has a new one out this week—just in time for today’s gathering of Herbalife opponents.

Herbalife protest planned in California

More than 30 people who say they were victimized by Herbalife will be attending today’s event, which is scheduled for Macarthur Park in Los Angeles. Several minority rights organizations will also attend, as will Cudahy Mayor Chris Garcia and Lynwood Mayor Aide Castro.

In a press release, the coalition of groups against Herbalife Ltd. (NYSE:HLF) said that the California Attorney General’s Office has received more than 130 consumer complaints against the company. The group claims that nearly 1,200 Herbalife distributors “are forced to drop out in California because they cannot succeed under the company’s pyramid structure.”

In addition, they claim that 88 out of every 100 Herbalife distributors never get any payments from the nutritional supplements company.

Bill Ackman targets Herbalife distributor Chris Carley

Chris Carley

In a new post on his website about Herbalife Ltd. (NYSE:HLF), activist investor Bill Ackman has posted yet another profile of one of the company’s distributors. This time he’s targeting Chris Carley, who has been selling the company’s products since 1992.

Lead generation once again rears its ugly head in Ackman’s criticism of Herbalife, as he claims Carley gave her distributors “recruiting scripts, lead generation services and other business methods” through her organization Dare to Succeed.

On her Facebook Page, Carley is said to claim that she makes more than $86,000 in royalties per month, although the page is no longer publicly searchable. Her recruiting video focuses a lot on the luxurious home she said she can afford because of her Herbalife sales.

Herbalife actually sued Carley and S&C Mareting in 2001, accusing her of a number of things, like offering or paying fees for recruiting other distributors, not giving full refunds and “using atypical testimonials without the requisite disclaimers.” The post notes that the lawsuit means Herbalife Ltd. (NYSE:HLF) was aware of her business practices, but the company requested that it be dismissed the following year.

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