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.
You may also be interested in...
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.
Herbalife Stretching Product Selection, Distributors Offer Customers More
"The way you reached more customers is you signed one of your customers up as a rep, and they went and reached more, and that was the nature of the business model," says co-president John DeSimone. Today, distributors need larger variety of products to offer customers in the health, wellness and fitness space.