Updated from 2:23 p.m. ET to include Kerrisdale Capital comment
NEW YORK (TheStreet) - The Federal Trade Commission has opened an investigation of multi-level supplements seller Herbalife (HLF - Get Report). The move comes over a year after hedge funder Bill Ackman of Pershing Square Capital Management took a $1 billion short position in Herbalife's shares and accused the company of being a pyramid scheme.
Herbalife disclosed the probe on Wednesday afternoon and said it "welcomes the inquiry" and will cooperate fully with the FTC. Dan McCrum of the Financial Times Alphaville blog first reported of the inquiry.
"Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC. We are confident that Herbalife is in compliance with all applicable laws and regulations," the company said.
"Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the lives and health of its consumers for over 34 years," the Los Angeles-based company added.
A Pershing Square spokesperson declined to comment.
Shares of Herbalife, which were halted earlier today, were down 8.2% at $60.03 in mid-afternoon trading.