A federal judge has dismissed a lawsuit accusing Herbalife Ltd and its chief executive officer of misrepresenting the weight-loss and nutritional products maker's sales practices as legitimate when the company was "at its core" a pyramid scheme, Reuters reported yesterday. U.S. District Judge Dale Fischer in Los Angeles, who dismissed a version of the complaint in March, said on Tuesday that the Oklahoma Firefighters Pension and Retirement System did not show the defendants defrauded shareholders by concealing the company's inability to track retail sales. The judge also said that CEO Michael Johnson's reducing his Herbalife stake by a net 12 percent over roughly one year, while "undeniably large," did not raise suspicions, nor did disclosures that top executives expected "some form of disciplinary action" over the company's business practices. "Herbalife openly disclosed that it was susceptible to legal challenge precisely because its practices occupy the gray area between legitimate multi-level marketing company and illegal pyramid scheme," Judge Fischer wrote.
