Article: Ackman Stands by Herbalife Pyramid Claim as He Reduces Short

Ackman Stands by Herbalife Pyramid Claim as He Reduces Short

Ackman has accused Herbalife of swindling unsophisticated consumers with false get-rich promises using overpriced products that hide a pyramid scheme. He has urged U.S. regulators, elected officials and community activists to help shut it down.

Operators of pyramid schemes typically seek to make money by recruiting new members who pay fees to existing members rather than relying on just the sale of goods and services.

The Federal Trade Commission has said modern pyramid schemes can use products to hide their true intent.