FBI launch Herbalife criminal investigation
Due to the lack of information that usually surrounds regulatory investigations in the US, this one’s going to be brief.
Last we checked in with Herbalife’s regulatory woes, the company acknowledged that they were under an FTC civil investigation.
Now comes the news that the FBI and Department of Justice are also involved…
Speaking to the Financial Times, “people familiar with the matter” confirmed
The US Department of Justice and the Federal Bureau of Investigation are investigating Herbalife.
When the FT contacted the FBI they “declined to comment”, however CNN managed to get in touch with a “law enforcement official” and confirm that
the U.S. Attorney’s Office in Manhattan and the FBI have been investigating Herbalife for several months.
Curiously, whereas Herbalife themselves revealed the FTC investigation to the public, it appears they had no idea the FBI were also involved:
We have no knowledge of any ongoing investigation by the DoJ or the FBI, and we have not received any formal nor informal request for information from either agency.
We take our public disclosure obligations very seriously. Herbalife does not intend to make any additional comments regarding this matter unless and until there are material developments.
Wouldn’t want to be working at Herbalife’s PR department right about now.
What piques my curiosity is the FTC investigation I get, I myself reviewed Herbalife and concluded there’s some massive recruitment orientated dodginess going on. What the FBI are looking into though… well, let’s just say I’m as clueless as Herbalife on the matter.
A criminal investigation, if anything comes of it, ups the stakes considerably. If I had to guess, I’d say they were perhaps trying to pin something on Herbalife management and/or one or more of their top affiliates.
That of course assumes the FTC investigation has come along considerably. Meanwhile the DoJ’s involvement could signal a joint taskforce probe, which would mean they’re obviously building a case against Herbalife.
What now? Well, as I mentioned at the start of the article unfortunately all we can do is adopt a wait and see approach. Looking at the bigger picture though, I think it’s pretty clear the direction this is heading in.
What that means for the MLM industry at large remains to be seen (bye-bye pretending affiliate’s purchasing products counts as retail!).