(Adds Herbalife comment, share activity)
April 15 New York Attorney General Eric
Schneiderman is investigating nutrition and weight loss company
Herbalife Ltd over claims it is a pyramid scheme, the
New York Post reported late Monday.
Shares fell 3.6 percent to $51.81 in early trading.
A spokesman for Herbalife declined to comment directly on
the Post's report but said in an e-mailed statement that
"Herbalife takes its disclosure responsibilities seriously."
Representatives for Schneiderman's office did not
immediately respond to a request for comment.
The New York Post said that at least two whistleblowers have
come forward and given Schneiderman's investigators sworn
testimony, citing unnamed sources.
Herbalife was hit with a shareholder class action lawsuit
Monday accusing the multilevel-marketing company of failing to
disclose to investors that its operations were based on a
pyramid scheme. The company on Monday said the complaint was
Last week, sources familiar with the matter told Reuters
that the U.S. Federal Bureau of Investigations was probing
Herbalife. A month before that, Herbalife confirmed that the
Federal Trade Commission had issued a civil investigative demand
to the company to look more closely at how it works.
The company has steadfastly denied running a pyramid scheme,
where distributors earn more money for recruiting new members
into the scheme than they do by selling products to consumers.
(Reporting by Phil Wahba in New York; Editing by James