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Herbalife shares jumped nearly 12 percent to $66.58 in premarket
trading on Friday, and looked set to open at a near two-year
high.
The settlement, expected to be announced Friday, will require
the company to improve disclosures about its distributors, the
people told the Journal.
The settlement will also tie distributor compensation to actual
retail sales and force the company to collect receipts,
according to the report.
The FTC opened a probe of Herbalife in 2014 following
allegations by hedge fund manager William Ackman that it had a
fraudulent business model that he compared to a pyramid scheme.
Ackman's Pershing Square Capital Management unveiled a $1
billion short bet against the company in 2012.
Ackman said on Thursday that he was still betting against
Herbalife shares and that the FTC probe was unlikely to end well
for the company as its business model is not built upon actual
retail sales.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by
Shounak Dasgupta)
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