Activist investor Bill Ackman's Pershing Square Capital says it is pleased by a consumer advocacy group's request for an investigation into the business practices of Herbalife (NYSE:HLF).
The group, the National Consumers League, on Tuesday said it had asked the Federal Trade Commission to launch a probe into allegations -- made by Ackman and others -- that Herbalife operates what is tantamount to a pyramid scheme. The National Consumers League describes itself on its website as a private, nonprofit advocacy group representing consumers on marketplace and workplace issues.
It said in its letter to the FTC that it had recently met separately with representatives of Pershing Square, the Direct Selling Association, and Herbalife. "We believe that only the Federal Trade Commission has the resources and expertise to investigate," the group wrote.
In its statement, Pershing Square said: "We are pleased that the National Consumers League, the nation's oldest and one of the most respected consumer protection organizations, has requested that the FTC launch an investigation of Herbalife. We believe that a thorough investigation of Herbalife will reveal it to be a pyramid scheme that has harmed millions of consumers in more than 80 countries around the world."