Herbalife Comes Out Clean Against the “Pyramid Scheme” Lawsuit By Oklahoma Funds

Herbalife, the nutritional supplement maker is in the limelight. The US district judge of the federal court, Dale Fischer in Los Angeles finally dismissed the "pyramid scheme" lawsuit in favor of the company. The Oklahoma Firefighters Pension and Retirement System lodged the complaint against the Chief Executive Officer Michael Johnson and Herbalife Company of deceiving the shareholders.

The Oklahoma's Lawsuit stated that the nutritional products and weight loss supplement company pretended to abide by the laws that are intended to avert the illegal business model or pyramid scheme as it is known. They accused Herbalife of devaluing the sales percentage offered to the retail customers hideously.

It was also said by the Lawsuit funds that Johnson was steadily involved in the daily affairs of the Herbalife and he was aware of the suspected misleading activity going behind the scenes. They complained that Johnson sold off $126million shares which he priorly knew of being inflated and thus, took undue advantage.

According to the Reuters, the District Judge, Dale Fischer on Monday decided that the Firefighters Pension and Retirement System of Oklahoma could not show enough evidence against the defendants that they planned to mislead the shareholders. Fischer mentioned that the Oklahoma lawsuit fund significantly tainted the business of Herbalife.

According to Fischer, even if there is Michael Johnson's involvement in grabbing the advantageous position yet, the evidence fail to support the suspected fraud complaint.

With the dismissal of the case, the Herbalife shares rose to 26% high at $58.39 on the morning of Wednesday in the NYSE (New York Stock Exchange).

As the Business Wire reports, Herbalife confirmed, "For the third time, the judge has ruled in our favor, this time dismissing the claims with prejudice. We are obviously pleased with the judge's decision."

The lawyer of Oklahoma Funds, Maya Saxena did not take action or comment on the requests made on Wednesday.

In the month of May 2015, a distributor accused Herbalife of misleading them. An amount of $15 million settlement was approved by some other federal judge during the same time.

According to Forbes reports, Billionaire Ackman is constantly trying to tear down Herbalife, the nutritional supplements MLM.

But, it is to be noted that this lawsuit is not attached to the billionaire Ackman's campaign against the Herbalife Company, who is also an activist investor of Pershing Square Capital Management LP. In the year 2012, December Ackman announced a $1 billion bet against Herbalife.