NEW YORK (TheStreet) -- The U.S. Department of Justice and Federal Bureau of Investigation have opened a criminal investigation into multi-level supplements-seller Herbalife (HLF), The Financial Times reported late on Friday afternoon.
According to the FT's report, a criminal investigation may not lead to charges and will be led by the U.S. attorney and FBI's New York offices. The FT also said investigators have not charged Herbalife.
Friday's revelation hammered Herbalife shares and comes nearly a month after the company disclosed that the Federal Trade Commission opened a probe into its business practices. That probe was also first reported by the FT.
That move came 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."We have no knowledge of any ongoing investigation by the DOJ or the FBI, and we have not received any formal nor informal request for information from either agency. We take our public disclosure obligations very seriously. Herbalife does not intend to make any additional comments regarding this matter unless and until there are material developments."
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