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Herbalife Under SEC Scrutiny On Regulatory Compliance In China

This article was originally published in The Rose Sheet

Executive Summary

Herbalife is the focus of a Securities and Exchange Commission investigation into anti-corruption compliance in the firm’s China business, the company reported in a Jan. 20 regulatory filing. An analyst covering the stock believes the investigation will have little impact on growth.

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US Penalizes Herbalife For Misleading Investors On Paying Distributors In China

SEC says Herbalife agrees to pay $20m to settle charges misled investors on how it compensated its distributors in China, making made false and misleading statements in SEC filings between 2012 and 2018.Global direct seller also separately announces projects for a product center in Shanghai and improved internet platform to boost sales in China.

Herbalife's China 'Issue' Doesn’t Stop Inside The Country

While China's scrutiny of promotions slows sales across health product space, Herbalife isn't downplaying a potential impact of SEC and DoJ investigations concerning its compliance in China with requirements of Foreign Corrupt Practices Act and its marketing in the countries. It says US agencies' investigations could reach "materially adverse" conclusions.

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