Justice for the victims of Herbalife isn’t all that just, but 350,000 of them are receiving compensation for a small portion of the losses they’ve incurred. This week, the Federal Trade Commission is sending out checks totaling $200 million to those victims. Sadly, the deal cut by the FTC and Herbalife in its historic settlement last summer wasn’t nearly enough to make them whole. The FTC should have demanded more–much more. The whole affair is a lesson in the incredible power of the multilevel marketing, aka “pyramid,” industry. Buyer beware.
Still, it takes a billionaire. Without Bill Ackman’s efforts, Herbalife would never have been exposed, and the victimizing would likely have continued. (The FTC agreed with virtually all his criticisms in its federal complaint against Herbalife.) Ackman has lost hundreds of millions of dollars in his valiant effort and endured a lot of scorn from his peers (and the media, which –myself excluded–largely sided with Herbalife for years.) Ackman is making money again, finally, with his hedge fund reporting a gain of 1.9% through Jan. 10.
Here’s my Institutional Investor story on the latest developments.
The video is Ackman and the Herbalife victims two years ago when he addressed them in a southside Chicago church.