Global nutrition company Herbalife Ltd. announced it has reached a settlement agreement with the Federal Trade Commission (FTC) resolving the FTC’s multi-year investigation of the company. The terms of the settlement do not change Herbalife’s business model as a direct selling company and set new standards for the industry. With the settlement agreement announced today, the FTC’s investigation of Herbalife is complete.
Herbalife and the Illinois Attorney General also reached a settlement, and the Company agreed to pay $3 million as part of this separate agreement. With the conclusion of the Illinois investigation, the Company is not aware of any active investigations by any other state attorney general.
“The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms.”
– Michael O. Johnson, Chairman & CEO, Herbalife
While the company believes that many of the allegations made by the FTC are factually incorrect, the company believes settlement is in its best interest because the financial cost and distraction of protracted litigation would have been significant, and, after more than two years of cooperating with the FTC’s investigation, the company simply wanted to move forward. Moreover, the company’s management can now focus all of its energies on continuing to build the business and exploring strategic business opportunities.