The Federal Trade Commission has launched a civil investigation into Herbalife, the Los Angeles-based nutritional-products maker said Wednesday.
Herbalife, which did not disclose any details of the probe, has been battling a hedge fund manager’s allegations that it is running a thinly disguised pyramid scheme.
“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC,” the company said in a statement. “We are confident that Herbalife is in compliance with all applicable laws and regulations.”
Herbalife’s shares sank, closing down more than 7 percent at $60.57, after the company disclosed that the federal agency had sent it a civil investigative demand.
The company sells nutrition and health products through independent salespeople in more than 80 countries.
Its products are not available in stores.
In December 2012, hedge fund manager Bill Ackman accused Herbalife of operating a pyramid scheme.
Ackman has kept up a relentless battle against Herbalife, releasing a steady stream of reports that purport to show Herbalife abuses.
— Los Angeles Times
It should come as no surprise that Target’s sales were hit by the December data breach that affected millions. But the number of people visiting its stores and Web site fell to the lowest level in three years, according to a recent report.
Only 33 percent of U.S. households shopped at Target in January, a decrease of 22 percent from the same time last year, according to a survey by Kantar Retail, a consulting group. The shoppers who stayed away the most included Gen-Xers — its core demographic — and lower-income, infrequent shoppers who make up a large part of its customer base.
Since the recession, Target has focused on serving its most loyal customers, said Amy Koo, senior analyst at Kantar Retail and a co-author of the report. “But over the last year, they’ve realized that that’s not enough,” and Target has tried to convert its occasional visitors into loyal shoppers.
The data breach threw a wrench into those plans.
Target’s core shoppers, such as its Red card holders, were more likely to be affected by the breach. But they will ultimately stand by the company, according to Koo. Those who shop at Target less frequently, however, have been scared away.
Visits by lower-income shoppers, defined as those who make less than $35,000 per year, decreased by 30 percent from last year, the report said. Visits by shoppers between the ages of 32 and 49 declined by 28 percent from the previous year.
Target did not comment on the findings of the report.
● A U.S. judge ordered Fabrice Tourre, a once high-flying Goldman Sachs trader dubbed “Fabulous Fab,” to pay more than $825,000 after a jury found him liable for defrauding investors in a subprime mortgage product that failed during the financial crisis. U.S. District Judge Katherine Forrest ordered Tourre to pay $650,000 in civil fines and give up an additional $175,463 bonus, plus interest, linked to the transaction at the heart of a Securities and Exchange Commission case.
● Citigroup has reduced the annual compensation of high-ranking executive Manuel Medina-Mora following problems with controls against money laundering at the Mexico subsidiary he oversees. Medina-Mora, 63 and co-president of Citigroup, was paid $9.5 million in total compensation for 2013, according to a proxy statement filed by the company on Wednesday. That was down from the $11 million he received for 2012, which was reported in last year’s filing.
● Jefferies will pay $25 million to resolve U.S. criminal and civil investigations into the investment bank’s mortgage bond trading after one of its former traders was convicted of defrauding clients, and authorities said they are investigating whether other individuals broke the law. The settlements announced by the U.S. attorney in Connecticut, the Securities and Exchange Commission and the FBI resolve charges that Jefferies failed to properly supervise traders who cheated clients taking part in a federal program to kick-start bond markets after the 2008 financial crisis.
— From news services
● 8:30 a.m.: Weekly jobless claims and February retail sales.