Pyramid power: Herbalife’s questionable business practices don’t faze Wall Street

On December 22, 2012, hedge fund manager Bill Ackman gave a three-hour presentation outlining why he believed Herbalife — a 33-year-old, multibillion-dollar, publicly traded nutritional supplement company — was actually an illegal pyramid scheme. The company’s business practices were unfair, he said; they targeted the poor and the uneducated, and they blatantly went against established protocols in the United States against endless chain selling.

Ackman argued that regulators at the US Federal Trade Commission (FTC) should immediately shut Herbalife down. He was so confident in Herbalife’s illegality that his hedge fund, Pershing Square Capital Management, placed a $ 1 billion bet against Herbalife’s stock price. Federal…

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