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Wed, September 30 at 4:00PM ET

Herbalife Shares Surge Despite New FTC Investigation Request

Company accused of being a pyramid scheme, but stock rises

Herbalife (HLF)is taking another PR beating, with an additional call for the company to be investigated on allegations that company acts as a pyramid scheme.

Despite this latest attack, HLF continues to surge, up more than 180% from its year low.

A Boston City Councilman has written the Federal Trade Commission to ask that its business practices be reviewed.

In the letter to the FTC, Boston City Councilor Tito Jackson said the company is “praying [sic] on disadvantaged populations and offering them income and hope,’ instead ‘they receive debt and despair.”

“I urge you to [conduct a] thorough investigation into Herbalife’s sales and marketing practices to ensure my constituents and the residents of Boston are protected.”

The complaint state that the company promises consumers a “generous compensation plan,” but that 88% of Herbalife’s participants were not compensated last year.

From Valuewalk:

Earlier this month, a National Latina Organization known as MANA also requested that the FTC investigate Herbalife Ltd. The organization claimed that the company engaged in “deceptive business practice and abuses” by encouraging Latinas and promising them an “exciting business opportunity” and “unattainable wealth and success.”

Article printed from InvestorPlace Media, https://investorplace.com/2013/09/herbalife-shares-surge-despite-new-ftc-investigation-request/.

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