Herbalife to pay $123M to settle investigations into its alleged corrupt practices

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Herbalife

Herbalife Nutrition Ltd (NYSE: HLF) agreed to pay a total of 123 million to settle the investigations into its alleged violations of the Foreign Corrupt Practices Act (FCPA).

Herbalife is a multi-level marketing (MLM) company developing and selling dietary supplements worldwide. The U.S. Department of Justice and the Securities and Exchange Commission (SEC) are investigating the company for allegedly engaging in corrupt practices in China.

Charges against Herbalife

The DOJ and the SEC alleged that Herbalife’s subsidiary in China bribed Chinese officials with cash, gifts, meals, and entertainment to obtain sales licenses, to end government investigation, and to remove negative coverage about it state-owned media.

Additionally, the U.S. regulator alleged that Herbalife China employees submitted and approved false expenses under the direction of their manager between 2012 and 2016. Those false financial expenses were incorporated into its parent company’s financial statements that were file in the United States.