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The Federal Trade Commission (FTC) is closing an investigation of Herbalife, an international multinational multi-level marketing corporation that develops, markets and sells nutrition supplements, weight management, sports nutrition and personal-care products.
Many Nigerians and people around the world, are known to be distributors of Herbalife products.
The Cayman Islands company agreed to fully restructure its U.S. business operations and pay a $200 million settlement over allegations that it deceived consumers, but it avoided more serious charges that it was operating as a pyramid scheme.
The company's shares are rising rapidly in premarket trading.
Under the settlement, Herbalife Ltd. will have to rework its compensation system so that retail sales are rewarded, and scrap incentives that reward distributors for recruiting.
Herbalife disclosed in 2014 that it was being investigated by the FTC for possible “deceptive practices.”
The company Friday that the FTC settlement doesn’t change its business model as a direct selling company. Herbalife will also pay $3 million in a separate agreement to settle an investigation in Illinois, USA.
