Herbalife Probe Has Stocks Fall Before Early Afternoon Rally

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By Jacob Maslow

Herbalife HQHerbalife Ltd (NYSE:HLF) is being probed by Unites States federal law enforcement. The company’s top members were contacted last week in an effort to obtain information on the company’s current business practices.

Early morning trading has seen the company’s stock drop 4.1% before a surprising early-afternoon rally where the stock is up .68% on the day.

The company is no stranger to government probes. There have been at least two investigations against the company with a possible third from the SEC. In total, the FTC and FBI have probed the company with the possibility of a past probe by the SEC.

The current probe includes as many as ten members of the company, which are currently under questioning.

Neither the authorities nor the members contacted have released information on what type of information is being sought. Herbalife has offered legal counsel for all members that are part of the ongoing investigation.

Stock prices began to rise as William Stiritz, Herbalife’s largest independent shareholder, stated that he will not be selling the company’s stock despite the investigation. As of February, Stiritz owned 8.12 percent of Herbalife’s stock.

Herbalife is also awaiting a final ruling from the Federal Trade Commission in relation to an investigation into Herbalife’s business model.

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