The FBI and Justice Department are investigating the nutritional product company Herbalife over potentially running an illegal pyramid scheme.
The criminal investigation was opened after hedge fund manager Bill Ackman accused the company of wrongdoing, reports The Financial Times, who first learned of the investigation. This investigation is just the cherry on top for a company already under civil scrutiny from other government agencies.
Though the DOJ and FBI are investigating, Herbalife has not actually been accused of anything just yet, beyond what Ackman has alleged.
Though the news is just starting to spring up now, law enforcement sources confirmed with the Los Angeles Times that there was an investigation in the works and that they began looking into Herbalife "more than several months ago."
The official, who spoke under condition of anonymity noted that though they are looking into the allegations, it's possible nothing comes of it. "We are doing our job of getting to the bottom of this issue. And I would stress that no one is going to be under arrest immediately. Maybe no one will be arrested."
Herbalife released a statement on Friday indicating they were unaware they were under investigation before Friday."We have not received any formal nor informal request for information from either agency."
Shares on Friday dropped after the news was first reported. They dropped 14 percent to close the day at $51.48.