Herbalife Charged by Feds With Making Bribes in China

Prosecutors agree to defer prosecution of Herbalife, for one count of conspiracy to violate the Foreign Corrupt Practices Act.
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Herbalife Nutrition  (HLF) - Get Report shares fell Friday and were briefly halted amid volatile trading after federal prosecutors in New York charged the health supplement maker with bribing Chinese officials.

The prosecutors did agree to defer prosecution of the company - for one count of conspiracy to violate the Foreign Corrupt Practices Act, according to Bloomberg, which broke the story

The U.S. government claims that from 2007 to 2016 Herbalife gave corrupt benefits to Chinese officials, including ones who work at government agencies and media companies, to boost its activity in China.

Herbalife recently traded at $47.99, down 3.40%. It fell as low as $43.03 Friday. The stock has gained 2% year to date.

Earlier this month, investor Carl Icahn said his Icahn Enterprises sold about 14.7 million shares of Herbalife but remains the nutritional-supplement company's largest holder with 15.5%.

Icahn still owns about 20.5 million shares of Herbalife. He said in a statement that "we continue to strongly believe in the great future of the company."

The stock sale was part of Herbalife Nutrition's self-tender offer. The company said it would buy back up to $750 million of its shares at $48.75 each.

"IEP’s investment in Herbalife is a quintessential example of our activist investment strategy," Icahn said.

Hedge fund heavyweight Bill Ackman of Pershing Square Capital famously lost an estimated hundreds of millions of dollars shorting Herbalife from 2012 to 2018.

He criticized its multi-level marketing business model. Ackman had a famous spat with Icahn over Herbalife on CNBC in 2012 that resembled a schoolyard quarrel.

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