Herbalife Nutrition Ltd. was a California-based multi-level marketing corporation that sold health care, personal care, and other products in more than 90 countries around the world, including China. Incorporated in the Cayman Islands, its stock is traded on the NYSE.
In its January 20, 2017 8-K report, Herbalife, which later changed its name to Herbalife Nutrition Ltd., disclosed that the SEC had requested from the company documents and other information relating to the company's anti-corruption compliance in China. The company further disclosed that it was conducting its own review, and that it had discussed with the DOJ both the SEC's investigation and the company's review.
In its 10-K filed on February 23, 2017, Herbalife disclosed that the DOJ had also requested documents relating to the company's anti-corruption compliance in China.
In its May 3, 2018, quarterly filing, Herbalife disclosed that it had taken some remedial measures, including the replacement of certain employees in China as well as the improvement of policies in China.
The company indicated that it cooperated with both the SEC and DOJ investigations.
In its 10-K filed on February 18, 2020, Herbalife disclosed that it was in discussions with the DOJ and SEC to resolve the investigation and that it had accrued $40 million in anticipation of a settlement. In its subsequent 10-Q filed on May 7, 2020, Herbalife disclosed that it had reached an agreement in principle with both agencies. Under the terms of that agreement, Herbalife expected to enter into a deferred prosecution agreement with the DOJ and an administrative proceeding with the SEC. All together, Herbalife expected to pay $123 million in penalties, disgorgement, and interest, so the company accrued an additional $83 million on top of the $40 million it had previously accrued for the settlements.
On August 28, 2020, both the DOJ and SEC announced enforcement actions against Herbalife.
