We are investigating Herbalife Nutrition Ltd. (HLF) (“Herbalife” or the “Company”) for potential violations of the federal securities laws.
On May 7, 2020, Herbalife filed its quarterly report for the first quarter of 2020 with the U.S. Securities and Exchange Commission (“SEC”). In its quarterly report, Herbalife advised investors that the Company had “reached an understanding in principle” to resolve bribery investigations by both the SEC and Department of Justice (“DOJ”) in connection with Herbalife’s China operations. Per the agreement, Herbalife stated that it “would enter into an administrative resolution with the SEC with respect to alleged violations of the books and records and internal controls provisions of the FCPA [Foreign Corrupt Practices Act]”; “would separately enter into a deferred prosecution agreement (“DPA”) with DOJ, under which DOJ would defer criminal prosecution of the Company for a period of three years”; and “would agree to pay the SEC and DOJ aggregate penalties, disgorgement and prejudgment interest of approximately $123 million.” As media outlets reported on the Company’s settlement over the following days, Herbalife’s stock price fell $1.61 per share, or 3.9%, to close at $39.62 per share on May 11, 2020.