Herbalife Tumbles After Overstating Growth in New Members
- Database errors led to misstatements on conference calls
- Company's gaffe hands a win to Herbalife foe Bill Ackman
Herbalife CFO Talks New Member Numbers
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Herbalife Ltd. tumbled after saying it overstated the growth of its customer and distributor base, bringing another headache to a company facing a federal investigation into whether it’s a pyramid scheme.
A metric called active new members increased 3.2 percent worldwide in the fourth quarter from a year earlier, not the 16.7 percent cited on a Feb. 25 conference call, the Los Angeles-based company said in a regulatory filing Thursday. U.S. active new members increased 30.7 percent, not the 71 percent mentioned on the call, Herbalife said. Those were among more than two dozen instances of misstated statistics, according to the filing.