Is Herbalife (HLF 0.45%) a pyramid scheme on the verge of an FTC shutdown? If so, some well-regarded hedge fund managers and a legendary CEO could be about to lose a significant chunk of capital.

As of the end of March, funds managed by Carl Icahn, George Soros, and Kyle Bass owned stock in the multilevel marketer. Bill Stiritz, the CEO of Post Holdings, has used his personal fortune to buy more than 5% of Herbalife.

Herbalife bulls often take to citing the presence of these investors as sufficient reason to buy shares of Herbalife. While I can't dismiss their legendary track records, I can say confidently that investors in the company shouldn't blindly follow them into any particular stock -- Herbalife or otherwise.

Icahn is often right, but not always
Carl Icahn amassed his $23 billion fortune by being right more often than he's been wrong. Still, Icahn has had some significant misses over his career, and he doesn't pretend to be infallible.

Most recently: Blockbuster Video. Icahn amassed a significant stake in the company in 2005, and rode it all the way into bankruptcy. He lost more than $300 million on his investment in the now-defunct movie rental chain, and flatly declared it the worst investment he'd ever made. If Herbalife is shut down, it will top his Blockbuster blunder.

"Can I be wrong?" Icahn said in an interview with CNBC last year. "Sure. I've been wrong before."

Soros is a trader with limited involvement
While Icahn is an activist shareholder, often committed to his investments for long periods of time -- Herbalife, in particular, with his seats on the company's board of directors -- George Soros has made his billions from trading.

As Soros is known for changing his mind frequently, there's no telling why he invested in Herbalife, or for how long he intends to stay in the company. Like Dan Loeb's Third Point, his funds may have bought Herbalife for a short-term trade. Soros has made no public statements in regard to Herbalife, leaving investors completely in the dark in terms of what he may see in the company.

That's assuming he sees anything at all. Although his funds still bear his name, Soros has largely been in retirement for the last few years, with limited involvement. Of course, Soros' employees don't carry the same name recognition, but it may be more accurate to say the individuals Soros has hired to watch his money are betting on the multilevel marketer, rather than the Hungarian philosopher himself.

Bill Stiritz is known as a manager, not an investor
Bill Stiritz is renowned for his experience managing a variety of consumer goods companies, from Purina to Post Holdings. While his management acumen is without question, his reputation isn't the by-product of intelligent investing.

Stiritz has experience with protein powder, and consumables, but not multilevel marketing -- or for that matter, multilevel-marketing companies facing a great degree of regulatory scrutiny. According to Bloomberg, Stiritz's investment in Herbalife was motivated by his friendship with Carl Icahn and his discussions with former Herbalife analyst Tim Ramey, whom he later hired for a special position at Post.

Kyle Bass has a mixed track record when it comes to equities
Kyle Bass has gained some notoriety in the hedge fund world for his prescient and extremely profitable calls on the European debt crisis, and his long-standing contention that Japan is a society on the verge of a demographic-fueled collapse.

However, his individual equity investments have been decidedly less interesting and less impressive, particularly in recent months. Last year, at the Ira Sohn investment conference, he recommended Dex Media -- shares are down more than 50% since then.

Obviously, one poor call does not negate Bass' larger track record, but if he was wrong on Dex Media, who's to say he's not wrong on Herbalife?

Herbalife is not about the 13Fs
For investors interested in Herbalife, it is not a question of which legendary hedge fund manager or business magnate has bought the stock -- or for that matter, sold it short. (Although Ackman is the only hedge fund manager to have gone public with his position, it's possible other big name investors are betting on the firm's collapse. Unlike long positions, shorts do not have to be disclosed.)

Rather, it's a question of the legality of Herbalife's business model -- is the company operating an illegal pyramid scheme? If the FTC ultimately comes to that conclusion, it won't matter who's holding the stock.