FTC Investigation Concludes: Herbalife Not a Pyramid Scheme

Herbalife (HLF) - Get Report shares soared Friday on news that the Federal Trade Commission has determined the food-products distributor does not equate to a so-called pyramid scheme. The FTC and Herbalife reached a settlement over the company's direct-selling business practices. Herbalife has agreed to restructure its multi-level marketing operations and pay $200 million to settle the FTC charges. The settlement will require the company to restructure its business so that participants are rewarded for what they sell, not by how many people they recruit. In a statement, Herbalife CEO Michael Johnson said, 'The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms.'