Herbalife Wins Lawsuit Dismissal – Again

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Downtown L.A. supplement company Herbalife and Chief Executive Michael O. Johnson dodged a bullet Tuesday when a federal judge in Los Angeles dismissed allegations of misrepresenting sales practices and orchestrating a pyramid scheme.

The Oklahoma Firefighters Pension and Retirement System accused Herbalife and Johnson of violating securities laws by deceiving investors. It accused the company of operating a pyramid scheme, claiming it made most of its money through recruiting others to sell its products rather than by actually selling them itself.

The pension fund filed its claims in May after the court dismissed similar allegations in March.

Though it didn’t have any more luck this time around, neither did the judge endorse Herbalife’s practices.

“The allegations do not, however, permit the inference that defendants misrepresented Herbalife’s operations with deliberate recklessness or an intent to deceive,” U.S. District Judge Dale Fischer wrote in his decision Tuesday.

Herbalife did not immediately respond to a request for comment Wednesday, but the company’s shareholders have certainly welcomed the news.

Shares climbed 6.7 percent since the court’s decision was issued Tuesday, closing at $51.89 Wednesday.

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