May 2, 2022

Herbalife, Part 2

Part two is served.

In the second half of this series, we discuss the Herbalife Nutrition Clubs, including the tactics used to recruit distributors and the class action lawsuit that followed.

The story then takes an unusual turn…to Wall Street. We cover the billion dollar bet made against Herbalife and the less than savory strategies used to try to take them down.

What do Kamala Harris and the FBI have to do with this story? Listen to find out!

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Astrup, A., Breum, L., & Toubro, S. (1995). Pharmacological and clinical studies of ephedrine and other thermogenic agonists. Obesity Research, 3(S4), 537S-540S. 

Baião, D. S., Conte-Junior, C. A., Paschoalin, V. M. F., & Alvares, T. S. (2016). Beetroot juice increase nitric oxide metabolites in both men and women regardless of body mass. International Journal of Food Sciences and Nutrition, 67(1), 40-46. 

Bloomberg News. (2000, Aug 12). Binge Led to Death of Herbalife Founder. The New York Times. 

Braun, T. (2016, Oct 7). Herbalife exploited the American Dream, new documentary shares details. The Hill. 

Braun, T., Zipper, G., Adair, D., & Ackman, B. (2017). Betting on Zero [Film]. Biltmore Films & Zipper Bros Films.

Business Wire. (2013, Oct 28). Herbalife Announces Appointment of Dr. Richard H. Carmona – 17th Surgeon General of the United States (2002-2006) – to Board of Directors. 

Chicago Tribune. (1985, May 3). Herbalife’s claims drawing medical fire, government probes. 

Copage, E. V. (2000). Mark R. Hughes, 44; Founded nutrition supplement concern: Obituary (obit). The New York Times. 

Curtis, G. (2021, Aug 6). Activist Investors: A Good or Bad Thing? Investopedia. 

Daily Mail. (2013, Aug 17). Married millionaire Herbalife salesman who enjoyed a lavish lifestyle and owned four homes across the world 'killed himself with a single gunshot'. 

Direct Selling News. (2021, Feb 18). Herbalife Nutrition Reports Record-Breaking 2020 Net Sales of $5.5 Billion.,net%20sales%20in%20company%20history 

Duffy, C. (2020, Aug 28). Herbalife to pay $123 million to settle China bribery charges. CNN Business. 

English, C. (2017, Jan 10). Herbalife pays up after being accused of pyramid scheme. New York Post. 

Federal Trade Commission. (2019 Oct). Multi-Level Marketing Businesses and Pyramid Schemes Consumer Information. Retrieved by 

Gugliotta, G. (2000, Mar 19). FDA Takes Aim at Ephedra. The Washington Post. 

Hayden, E. (2022, Apr 20). Hedge Fund Titan Bill Ackman Sells All Netflix Stock as Billion-Dollar Bet Flops. The Hollywood Reporter. 

Heller, M. (2001, Feb 18). Death and Denial at Herbalife. Los Angeles Times. 

Herbalife Nutrition. (n.d.). Lou Ignarro. 

Iilluminaughtii. (2020). Herbalife: Selling Their Lies, Part 1 & 2 [Youtube]. 

Li, Y. (2022, Mar 29). Bill Ackman is done with activist short-selling, will focus on quieter, long-term approach. CNBC. 

Lombardo, C. (2021, Jan 3). Carl Icahn Sells More Than Half of His Herbalife Stake. The Wall Street Journal. 

Marshall, L. (2017, Feb 17). Women dominate in direct selling, but men could be catching up. New Hope Network. 


Nazaryan, A. (2019, Mar 18). Why Did Kamala Harris Let Herbalife Off The Hook? The Huffington Post. 

Roth, P. (2020, Jun 9). Short squeeze: The game theory of a billion-dollar bet. The Breeze. 

Wiener-Bronner, D. (2022, Apr 21). Carl Icahn slams McDonald’s over animal welfare practices in fiery letter to investors. CNN Business. 

Wilkes, B. (2016, Aug 19). Hispanic purchasing power won’t be ignored, ask Herbalife. The Hill. 

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Hi everyone, I’m Becca.

S: & I’m Sarah! And you’re listening to Unsavory. 

B: Today we are back with part two of our Herbalife episode. This nutrition MLM is so scandalous that it’s taking us two episodes to cover! So, if you haven’t listened to part 1 yet, I highly suggest doing that first. But with that, Sarah, what were your key takeaways from the first part of this series?

S: Oof haha well, Herbalife is not a great company that’s for sure! To recap, the founder launches Herbalife and used his mother’s tragic death from diet pills for marketing, there’s a lot of the classic MLM behavior of encouraging distributors to bring in friends and family members with extravagant promises and little-no pay out, and I think we closed with the FDA banning the use of ephedra in their products because it was unfortunately linked to a number of deaths… did I capture it all?

Yes, exactly. And if you can believe it, this part is equally if not more scandalous. Today, we’re going to talk about how Herbalife has targeted lower-income immigrant communities by using manipulative “American Dream”-like marketing propaganda; as well as how one business tycoon bet $1 billion dollars that the company would fail and then tried to make that happen using some less than savory tactics. BUT ALSO, how Kamala (COMA-LA) Harris - the vice president of the United States - got involved in all of this drama.

S: Part one knocked my socks off, so I’m very excited to hear the rest of this scandalous story. Let’s do it.

Some of my sources for this episode include articles written by Matthew Heller in The LA Times, Phillip Roth in The Breeze and the Betting on Zero documentary. And as always, you can find all of the sources used in this episode in our show notes at

So as you’ll remember, Herbalife was thriving in the 90s despite selling controversial weight-loss promises and facing multiple lawsuits. However, Herbalife took a hit when its founder, Mark Hughes was found dead of an accidental overdose, tragically similar to his mother’s.
Acquisition & Restructuring
Immediately following his death, the Herbalife stock fell almost 50%. But at this point they have some of the best PR firms and lawyers on their side, and they start hiring athletes to help promote the products - again pushing this false narrative of a healthy lifestyle in using the Herbalife products.

S: Wait, I’m a bit confused about why the stock fell so drastically? Did the company lose credibility for a hot second? 

So from my understanding, the company’s stock had started to plummet a bit before Hughes’ death - apparently he was selling stock options for discounted rates to people on the inside - and the current investors were pissed. But then after he passed, the company lost some of their credibility since their cheerleader, who promoted this seemingly “healthy” lifestyle died because of an addiction - something that doesn’t fall in line with that perceived lifestyle (Heller, 2001).

S: Okay yes, makes sense. Reminds me a bit of the Atkins situation. 

But then they bring in Michael Johnson as the new CEO. And Johnson is another super charismatic guy - he’s athletic, driven, and determined to reinvent Herbalife’s image. He was also the former Disney International president - so he was already a big wig. 

And a quick side note - in 2011, when Johnson was with Herbalife, he was the highest paid CEO in America. His compensation package alone was over 89 million dollars. 

S: OMG. 

During those next few years, they really work on Herbalife’s image and credibility in the health and wellness industry. They bring this doctor Louis Ignarro onto their Nutrition Advisory Board. And this doctor has a very impressive resume, he has specializations in pharmacology and is a Nobel Prize winner in Physiology or Medicine.

S: Omg what?

Ya, he became a Nobel Laureate in 1998 for his discovery of the range of benefits of nitric (NITE-RICK) oxide on the human body. But what’s hilarious is that on the Herbalife Advisory Board website, there’s an asterisk next to the description of his prize with a footnote reading: “* The Nobel Foundation has no affiliation with Herbalife and does not review, approve or endorse Herbalife® products” (Herbalife Nutrition, n.d.)...which made me laugh.

S: You know they wish they could revoke that prize! 

Oh I know! But I also wonder if researchers in general are considered a bit quacky when they start testing and investing in new scientific discoveries. Like I’m sure even Einstein seemed a bit weird before he was considered a genius. It’s a fine, but critical line. 

S: And the big difference is that a true professional won’t promote something until a true link or causal relationship has been established.

For sure, including weight loss and health products… Since joining the Herbalife team, Ignarro has helped them create products that help boost the body’s production of nitric oxide, which is a vasodilator - so it relaxes our blood vessels which increases the flow of our blood and decreases blood pressure. So it has important benefits.

S: They could have just drank beet juice! (Baião et al., 2016).

I saw a few nitric oxide-promoting products with beetroot in my research! But couldn’t find any Herbalife products with it. But a great suggestion.

So it’s reported that Ignarro has made millions of dollars from the company. The Betting on Zero documentary said the figure was somewhere around 22 million. 

I must say though, I was looking at the Nutrition Advisory Board today, and they do have a number of MDs, dietitians, and healthcare PhDs on the roster. I was impressed.

S: Hey, companies can change and adapt, especially if there is enough public pressure or a changing paradigm around what consumers want. I’ll withhold judgment for now. 

Then in 2013, they brought Dr. Richard Carmona on as a board member. He was the 17th Surgeon General of the US and he has an interesting background to make note of. So he was born in NY to a Hispanic family who apparently struggled with finances, homelessness, and health issues. He became a Vietnam veteran who later went on to get his bachelor’s and medical degrees, and eventually became the Surgeon General (Business Wire, 2013).

And I am not regurgitating his resume because he’s not qualified to be a board member…because he clearly is. He may even be over qualified. But this rags to riches story about this super successful Latino man really mirrored what Herbalife was marketing at the time. And what they began doing - or were accused of doing - is targeting Hispanic populations by promising an improved quality of life using American Dream-like propaganda. 

S: With the perfect spokesperson to boost their credibility…. 
Marketing in Hispanic Communities 
Now if we were to cover all of the issues that Herbalife has initiated with their global marketing tactics, we would be here all day. So today we are going to focus on a few instances in the US. Because that’s where there is the most information.

So it has been reported that up to 80% of Herbalife’s sales can be attributed to their success in Hispanic communities (Wilkes, 2016). While the initial push to grow a “health” business within these communities seems wonderful, there has been a lot of criticism about Herbalife’s deceptive recruiting tactics here. Mainly speculation that they targeted lower-income families with promises of independent income, increased quality of life and helping others achieve their health goals. And of course, as we know, these are empty promises, since less than 4% of all Herbalife distributors make more than $300 in net income. And this was discussed in Part 1 of the episode if you are just tuning in.

Nutrition Clubs
Herbalife had already had business success in Hispanic communities globally, then in 2004, a distributor couple in Mexico launched this new recruitment initiative, in having these discrete invite-only gatherings to socialize about nutrition and fitness and to try the Herbalife products. And that’s basically how the Herbalife Nutrition Clubs were born. 

S: So they were physical shops with the products?

Exactly. But what they really became was a front for distributors to recruit other distributors. Only - Herbalife storefronts were not allowed, so they made them more like pop-up shops (but some of which were more permanent). They had a very strict set of rules that must be followed, including that you were not allowed to use the Herbalife name, logo, or the words “nutrition club”; and that you could not advertise or promote the club; but the clubs were also not open to the general public - which is all very suspicious. I feel like you’d have to break at least one of these rules to get anyone to come…

Anyways, these clubs have been noted to have been successful because they offer more of that comradery or social support - something that the previous Herbalife interactions didn’t allow for. 

It was about $5k-6k to start one of these clubs, and they would charge visitors about $5/day - often serving Herbalife shakes, aloe water, and teas. There was some research done using these expense and entrance income estimates, as well as estimates of foot traffic and additional purchases of products made at the nutrition clubs. And it’s estimated that many of these clubs lose about $12k annually…UNLESS the clubs were being used as a networking opportunity to create distributor downlines. So most of the nutrition club members were therefore fellow distributors, meaning that a lot of the money made was within the distributor community - basically creating this money transfer scheme. Except that it wasn’t being transferred that far.

S: So the clubs are a money pit unless you can use them to recruit more Herbalife distributors…
Personal Experience
There are a few really upsetting stories shared in the documentary that I watched - one shared by Julio Ulloa - who previously owned a construction company, which he gave up to invest in an Herbalife Nutrition Club. He bought thousands of dollars worth of product with the promise that he would make it back quickly, as well as have the opportunity to help improve the health of his community. And the individual who was making these promises…was a good friend of his - so not the current CEO Michael Johnson or some rich Herbalife distributor - but a friend who had Julio in his downline. 

When Julio started feeling a bit deceptive about his own Herbalife business practices (which he was encouraged to use), he pulled out of the company. But he lost his savings, his home, and apparently even his family. He had no other choice but to move into a cramped 3-bedroom apartment with two other former Herbalife distributors (Braun, 2016). Is it coincidence that there were other Herbalife distributors looking to downsize? I think not.

Now we can’t blame Julio’s friend, obviously, because he was being manipulated by these same recruiting tactics. But the worst part about this whole scheme is that they encourage distributors to recruit their friends and family members. So if and when their Herbalife business fails, ex-distributors also often lose friendships or relationships, along with their savings. 

S: & that’s why people get so trapped in these MLM schemes. It’s not just a job, but it encompasses many areas of their life. 

There’s even this phenomenon called the “Pop & Drop” which has been used to describe this pyramid scheme structure…and basically it describes the immediate popularity of the business in new communities - so that’s the pop; and then how this popularity dies off with a “drop” once distributors realize that they are being scammed. It’s really sad. 

(Braun et al., 2017; Illuminaughtii, 2020)
The Class Action Lawsuit
Anyways, this community advocate named Julie Contreras, who’s from a city in Illinois that I cannot pronounce (Waukegan); she first heard about the scandal within Herbalife from a friend who had actually invested in the company. She claimed this friend’s house was full of Herbalife products - they were in every room in every corner, but he kept purchasing the inventory because he was being fed the same empty promises that everyone else was falling for. 

And we talked about this in Part 1, but victims of pyramid schemes are often hesitant to come forward due to the fact that they may not even realize that they were scammed in the first place and they may take the loss on as their own personal failure. And even if they do acknowledge that they were scammed, they may be hesitant to come forward due to embarassment. But Contreras had a hunch that there were others who had been victimized by this company, and she encouraged her friend to speak out. So together they held a press conference to see if they could find more victims. And they did. Many of whom were undocumented immigrants.

S: Oh no. Of course, the most vulnerable and the least likely to come forward and report something to the authorities. Also, people that are desperate to find a career that offers the ability to generate independent income. 

So in a small fraction of the business, we have the super rich distributors, who fly around showing off their Herbalife wealth. And then there’s what has been referred to as the “no fly” distributors, who can’t leave.

Together they hire a lawyer named Douglas Brooks - actually I think he does the work pro bono - this guy seems amazing; they put together a case, and launch a class action lawsuit against the company in 2015. And I should mention that Julio Ulloa who lost his construction company - he joined in on this as well. And this group got so many plaintiffs together, it’s really quite impressive (I mean, sad that there’s so many plaintiffs) but impressive that they were able to find so many. 

In total, 1.55 million Herbalife distributors became class action members in this lawsuit.

And within this group, the average financial loss with the company was $8k. If we do some fast math, that’s over 12 BILLION DOLLARS. But to put things in perspective, Herbalife made 5.5 billion in revenue in 2020 - so really that’s about 2 years worth of revenue for them (Direct Selling News, 2021). 

S: Wow.

So Herbalife tried to settle by offering the plaintiffs $15 million - which seems like a lot of money to you or I, but if distributed amongst the group, would mean that each victim would receive a $10 settlement (S: OMG!!!). So they rejected the settlement and brought the case to the Federal District Judge. And then this judge just rejected it. She apparently wasn’t moved by any of the stories or arguments and just tossed it. But I’m sorry, if there are 1.55 million people saying they felt victimized and asking you to look at their case, there’s no way you’re just tossing it aside. I’m very skeptical of this decision.

S: She just tossed it?! That’s heartless. 

Mhmm. But we’ll come back to this lawsuit again in a bit.
Bill Ackman & Shorting Herbalife
Now there is a massive part of this story that we haven’t even touched on yet. This might be one of the more unusual parts - and it’s so interesting. So now we have a new player in the game - Mr. Bill Ackman. He hasn’t really been involved in the story up until this point, even though some of what I’m about to describe to you takes place prior to the class action lawsuit. 

Bill Ackman is this Wall Street type - he’s an investor, a hedge fund manager, and what’s called an activist investor - which is someone who buys stake in companies in order to influence how they run.

S: That sounds a bit manipulative.

From my understanding, it is pretty aggressive. Since these investors will go into a company and quite literally try to manipulate management decisions, or even try to change the management structure. But they’re also normally there to help the company - so they might see things that the company has overlooked and they do usually try to improve things - at least financially (Curtis, 2021).

S: He must have seen something he could influence in Herbalife…. 

Definitely. And that’s one of the many hats that Ackman wears. You could say he’s a risk taker when it comes to business. FOR example, in May of 2012, Ackman made a 1 billion dollar bet that Herbalife’s stock would crash to zero. 

And he makes this bet because he considers Herbalife to be the largest fraud in terms of scale and numbers of countries involved. (and I don’t think he’s wrong). So basically what he’s doing is “shorting” the stock of the company. And Ackman explains this in layman’s terms as follows…: you borrow some rare coins from a friend, you sell them to someone else for $1000, then you wait for the value of those coins to drop, and you buy them back for $500. You return them to your friend, meanwhile you’ve made a bunch of money. And then you can distribute some of that money to your coin investors for letting you borrow their coins. So you’re taking a huge risk in assuming that the stock will go down, because if it goes up, you’re screwed since you’ll be forced to buy back at more than what you originally sold for.

Does that make sense?

S: Yes, I think so. I’ve never heard of this before. So Ackman used other people’s Herbalife shares and sold them to other investors with the hopes that the value of the company will go down and he can buy back his shares for less?

Exactly. Have you seen the Big Short?

S: YES such a good movie. 

It is similar in that in that story they short or bet against the housing market. Although I found it difficult to keep up in that movie with no background in this stuff whatsoever. So it felt like a very new concept to me while I was doing this research too.

OK - so Ackman borrowed people’s shares - worth $1 billion - and sold them to others at market price, which was said to have been about $35 a share. So he was toying with over 28 million shares (Roth, 2020).

This meant that Ackman would make money, potentially millions or billions of dollars, if the Herbalife stock crashed. So he wanted Herbalife to fail once he was in the game. And one of the best ways to win a bet against a company is if they’re doing something illegal - because then you’ll have regulatory bodies within the government trying to take them down as well.

And do you know how else you can influence stock? 

S: You influence the public. 

Ya - so you need to have public influence to do something like this, but that’s something that Ackman already had. Right away he begins speaking very publicly about Herbalife and the legalities of what they were doing - or what he thought they were doing. And people loved to interview him on their news broadcasts and whatnot since he always seemed to deliver something scandalous or exciting. 

At this point, he starts to get the government on his side, as well as the public. People are listening to him and believing what he says. Then in December of 2012 Ackman straight up accuses Herbalife of running a pyramid scheme…and for a while the stock actually starts to decrease. At one point they went down 63% which would have earned Ackman about $600 million dollars had he cashed out then (Roth, 2020).

S: Is this guy a hero or a villain?! He’s trying to make millions of people lose money but at the same time spreading awareness about the shady practices of Herbalife!

Oh I know. I’d say he’s neither. Maybe leaning more towards being a good guy? With some selfish undertones.

But this whole thing gets very messy since it is so public. People accuse Ackman of stock manipulation - since he makes it seem like this is a takedown based on values and morals, when really he has huge financial interest in the collapse of this company. Then he says he’ll donate all his earnings from this deal, but people don’t really believe him. It’s a disaster. 

In 2013, a few weeks after Ackman’s big accusation, a former business partner of his reemerged into his life. This guy’s name is Carl Icahn (ICON) and he really is an icon in the investment world. He’s worth about $25 billion dollars and he owns shares in a lot of the biggest companies - like McDonalds. Like the other day (April 21st), he made a statement about his disappointment in McDonalds and their current animal welfare practices and it’s all over the news (Wiener-Bronner, 2022). 

All this to say, Carl Icahn has influence. And I’m going to keep saying Carl’s full name since Ackman and Icahn sound way too similar. But as I mentioned, he and Ackman had worked together previously - they had made an investment together about 10 years prior…but some stuff went down and Ackman actually sued Carl Icahn for $10 million dollars, and won. So there’s some tension between these two.

And you might be wondering what this all has to do with Herbalife. So knowing that Ackman was trying to short Herbalife, Carl Icahn basically screws him over and makes a huge investment into the company. And with Icahn’s investment the stock went UP. And I believe the documentary said it went up to an alltime high (where Ackman lost over 400 million). This is what’s called a “short squeeze” when you try to sewer a person trying to short a company. And in the background Herbalife is just coasting - all because of this feud between billionaires.

S: OMG the pettiness. Meanwhile, tons of small distributors are just trying to make back their $300 in net income… 

So then Ackman has to make a decision on whether he’ll pull out of this business venture before he potentially loses everything, or stick it out. And he decides to stick it out. It seems like it’s less so for the money, but moreso for his integrity and to demonstrate that his accusations against Herbalife weren’t empty. But in doing so he wasn’t really thinking of his partners who’s money he was using (Roth, 2020). 

He starts to press regulators to do an investigation into the company, comparing Herbalife to the early days of the tobacco industry in that their success depended on avoiding regulation. One major issue for Ackman was that he didn’t have voices for the victims of this pyramid scheme to help push or connect with regulators. Enter the good people of the class action lawsuit.

Ackman invested about $130K towards a victim recruiting campaign where he paid Hispanic groups to come forward. He connected with Julie Contreras and many others involved in the lawsuit. They were already speaking publicly about the case, but Ackman helped give them a platform to communicate to a larger audience. 

This seemed to have worked according to plan, as the Federal Trade Commission or FTC opened an inquiry and the FBI helped with the investigation - but apparently into both Herbalife and Ackman (for potential stock manipulation using false claims). Herbalife responds by doing things like reducing their shipping costs, simplifying returns, and shutting down any deceptive distributors. But ultimately, their stock ends up dropping.

In the meantime, the Attorney General of California receives a letter from prosecutors in San Diego, pleading with her to help with an investigation into Herbalife. And who was the Attorney General at this time? Well it was none other than current Vice President of the United States - Kamala Harris (COMMA-LA). I hate to say it, but this gets a bit scandalous for her.

Three weeks after that letter was sent to Harris, she received a large donation to her US Senate campaign from Washington lobbyist Heather Podesta. Podesta’s ex husband - Tony Podesta - owned a firm called the Podesta Group who had worked for Herbalife over the last two years. Heather Podesta’s own firm was also hired by Herbalife shortly after this incident…

You can probably guess what happened next - nothing. Harris did not launch an investigation into Herbalife and gave no reason for her decision (Nazaryan, 2019).  

A lot of people criticized her, including those a part of the class action lawsuit. Since her whole platform during the presidential campaign was as an advocate to those with less power and financial means. Yet when she was given the opportunity to help those who needed it - specifically Hispanic communities, it seems like she may have been bribed. And FYI this is total speculation…I have no idea what actually happened. But it sounds fishy.

What are your thoughts?

Maybe this would have distracted her from the larger goal
Do we think she’s innocent or had malintention 

Her support may have really influenced this case, which is so unfortunate. But luckily this isn’t the end for the 1.55 million Herbalife victims. 
Back to the Classaction

In July of 2016, the FTC announced that Herbalife is required to pay $200 million dollars to be divvied up between the distributor victims, as well as to “fundamentally restructure its business” model. BUT they were not deemed a pyramid scheme. Even though the FTC claimed that the compensation structure was the problem, and they were being forced to restructure their business FUNDAMENTALLY.  A bit ludacris if you ask me. 

The FTC has received some backlash from this decision. Since only 350,000 people involved in the case received any money. Those who spent less than $1000 on Herbalife inventory received nothing; and even those who spent more only received between $100-$500 of settlement money. So it was hardly a win and it definitely didn’t make up for their suffering or all of their advocacy efforts. 

But get this - IF a distributor had brought on other distributors to be a part of their Herbalife downline, they themselves did not qualify for compensation and received nothing (English, 2017). Even though they were also victimized - maybe even more so than the others. And this is so problematic because it’s putting the blame on the individual who tried to achieve success within the company by following the Herbalife business standards and practices - and this makes it seem like they were the ones who were - being deceptive rather than being deceived. 

S: Woah. And those are the distributors who have spent the most money.

Ya this wasn’t really justice….

So that was in 2016, but then by 2017, Bill Ackman had lost about $1 billion dollars in this deal. Herbalife had somehow climbed out of this hole, unscathed….I mentioned this earlier, but in 2020 they had made over 5.5 billion in net revenue, and last year they made over 5.8 billion. 

After his 5-year fight with the company, Ackman finally pulled out of the deal, and out of “short selling” in general (Li, 2022). The company’s stock never did hit zero, which was what Ackman was betting on. And I think he took this loss pretty hard since it was so public. But don’t feel too bad for him, because he is still a multi billionaire…and he’s still working (just not in shorting businesses). So last week he backed out of a 1 billion dollar activist investor deal that he had with Netflix (Hayden, 2022). I think he chalked up a pretty big loss there too, but he’s still fine.

So after Ackman retired his Herbalife feud, Carl Icahn sold his stake in the company too. And it’s estimated that HE made over $1 billion dollars during his time there (Lombardo, 2022).  Fun fact - in 2016, Carl Icahn was named the “Special Advisor on Regulatory Reform” to ex-president Donald J. Trump… 

S: hmmmm 
So, to sum it up, the wealthy businessmen left this deal - one with a billion dollars, and the other with some mild public humiliation. But the true victims remain victimized and some even revictimized by their own government. The Herbalife conglomerate continues to sell their “health” products using a similar but modified MLM structure…despite all the scandal. 

So much scandal that there’s even more that I couldn’t cover in this series:
Like the liver toxicity claims…where some Herbalife users developed liver disease consistent with drug-induced hepatitis while using the products
The top millionaire distributor who brought Herbalife into Mexico, who used now banned lead-generation tactics, and who tragically committed suicide in 2013
The fact that Herbalife had to pay a $123 million dollar settlement in 2020 to settle bribery charges in China (where they tried to bribe Chinese officials to obtain licenses so that they could sell their products)
Or the other lawsuits, including a $140 million dollar class action against 44 of the top Herbalife distributors for recruiting using false claims around “life-changing financial success” (Daily Mail, 2013; Duffy, 2020; Mora, 2020).

I honestly never thought I would hear of a food or nutrition company more scandalous than Subway..but Herbalife takes the cake. And that just about wraps it up. It’s kind of an unsatisfying ending but I don’t think this is the last we’ll hear about Herbalife. And I really do hope that these victims get the justice they deserve.

 Any final thoughts? Feelings? 

S: I definitely don’t think that this is the last we’ll hear of Herbalife, and I truly can’t believe how much scandal and drama there is surrounding this company… and it’s still going. I’m sure we’ll hear about from them! 

Our next episode is our season 2 finale and it’s a good one!!! 

(Braun et al., 2017; Illuminaughtii, 2020)