The Illinois Attorney General’s Office on Thursday said that it is investigating allegations that Herbalife is running a pyramid scheme.
Attorney General Lisa Madigan's office told wire services that it was urged by civil rights groups to look into the downtown Los Angeles nutritional supplement company months ago. New York hedge fund manager William Ackman, who has been shorting Herbalife shares since mid-2012, has been calling on such groups to pressure regulators to investigate the company.
Herbalife, which said it has 15,000 distributors in Illinois, defended its business practices and said that it would cooperate with investigators.
“We are confident in the integrity of our longstanding business and the company's compliance with applicable laws and regulations,” the company said in a statement. “We look forward to working with the Illinois Attorney General's Office to resolve the consumer complaints it has received.”
Shares closed down 17 cents, or less than 1 percent, to $55.10 on the New York Stock Exchange.