NEW YORK (AP) --— Herbalife said Monday that it is not aware of a law enforcement investigation reported by the New York Post.
The newspaper said late Sunday night that it found out about the investigation after the Federal Trade Commission released documents containing 192 complaints against Herbalife from the past seven years. The complaints, which reportedly included false promises made by Herbalife and difficulty the company's distributors had collecting income they were owed and getting refunds, were released by the FTC in response to a Freedom of Information Law request by the newspaper. But the FTC, reported the Post, said it didn't have to give out "information obtained by the commission in a law enforcement investigation." The agency's documents did not say whether the probe was criminal or civil, according to the Post's report.
The nutritional supplements distributor, which has also been defending itself against a hedge fund manager's accusation that it is a pyramid scheme, fired back later in the day.
"Other than the voluntary dialogue with regulators, which we communicated on our January investor day, we are unaware of any other regulatory interest and/or investigation. We are demanding a correction from the NY Post," the company said in a statement.
A representative for the FTC has yet to respond to a request for comment.
The Wall Street Journal had reported in January, citing unidentified sources, that the Securities and Exchange Commission had opened an inquiry into Herbalife Ltd.
Herbalife's stock has had a wild ride in the past few months as its business became a point of contention between several prominent Wall Street figures.
In December, hedge fund manager William Ackman alleged that Herbalife was a pyramid scheme and that he was shorting the stock. Short-sellers make money when the shares they're betting against decline.
Herbalife then tried to refute Ackman's accusations, in January holding an analyst and investor meeting that detailed how its business operates and who its customers are. Ackman replied that Herbalife "distorted, mischaracterized, and outright ignored large portions" of his presentation.
Then, in a blowup on live television in late January, Ackman and billionaire investor Carl Icahn traded barbs over an old investment deal and Ackman's position in Herbalife. Speculation is rife that Icahn has a minor stake in Herbalife, but he has refused to comment on whether he holds a position or not.
Yet another investor, Dan Loeb of Third Point LLC, has disclosed an 8.2 percent stake in Herbalife, a vote of confidence in the company, while Greenlight Capital's David Einhorn, one more prominent Wall Street figure, had raised concerns about Herbalife's business back in May.
Herbalife's stock dropped $1.05, or 3 percent, to $34.02 in Monday afternoon trading — it had dropped as low as $30.60 earlier in the day. Through Friday's close, the shares have lost 18 percent since Ackman disclosed in December that he was shorting the stock.