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 The network said the company disclosed the internal
figures after an ABC News investigation found what it called
"numerous examples of distributors boasting to potential customers
that the company's products helped treat maladies ranging from
diabetes to heart disease."
In one case, an ABC reporter posing as a customer caught a Staten
Island, New York, distributor on a hidden camera saying a woman
overcame a brain tumor after using Herbalife products, the network
said.
Asked by ABC in a televised report if Herbalife cured brain tumors,
Herbalife President Des Walsh said: "Absolutely not. Frankly, I am
appalled to hear you say this because what is happening there is a
complete and absolute violation of our rules."
Asked if such incidents happened often, Walsh replied: "I do not
believe so."
"These instances ... are absolute aberrations... This is not the
Herbalife I know," he told the network.
ABC said that since the interview, Herbalife had told the network it
disciplined almost 600 distributors last year for making such claims
and stripped 12 of their distributorships.
A company spokesman said in a statement to Reuters that as noted in
the ABC News report Herbalife "is explicit with its members that
products are not intended to diagnose, treat, prevent or cure any
disease or medical condition, and under no circumstances should
there be any statements, advertising or implications to the
contrary."
"Enforcement of the rules of conduct is a top priority at Herbalife,"
the statement added. "We have a compliance team of over 300 people
worldwide that monitors members' activity and enforces Herbalife's
rules."
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Several civil rights groups say that Herbalife is a pyramid
scheme, which is a company that makes more money from signing up
recruits than from selling products or services to customers.
The company denies the allegations. High-profile investors such as
Carl Icahn, George Soros and Daniel Loeb have supported Herbalife in
the past by taking stakes.
The Federal Trade Commission, the FBI, New York State Attorney
General Eric Schneiderman and Illinois Attorney General Lisa Madigan
have all started investigations into Herbalife.
Hedge fund manager William Ackman was the first to call Herbalife a
fraud. He placed a $1 billion bet against the company in 2012.
(Reporting by Peter Cooney; editing by Jan Paschal and Miral Fahmy)
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