Herbalife has gotten very popular over the last few years as a company that sells food supplements and nutritional shakes. In fact, it has gotten a network of distributors that has already grown into the millions. However, according to reports the FBI and The Department of Justice have placed the company under a criminal investigation which is still in the preliminary stage. Currently, there have been no charges filed yet against the company. However, when Herbalife management was sought for their comments regarding the issue, they said that they had no knowledge about the ongoing investigation.

In a statement it recently released, Herbalife said that they have not received any formal or informal requests from either government agency with regards to the investigation. They also said that there would be no more additional statements regarding the matter until developments have been made on the alleged investigation.

Bill Ackman, a hedge fund manager, publicly accused the company of being a pyramid scheme. He has published several reports about the alleged fraud among the senior distributors of the company. This move was immediately opposed by a lot of billionaires including Dan Loeb and Carl Icahn, who are among the company's largest shareholders. They rallied behind Herbalife and supported the company. Though Ackman has been crying foul for many years now, no one seems to take his claims seriously. However, with the way things are playing out now, it seems like his persistence to publicly destroy Herbalife is finally paying off.

It is important here to note that not all probes lead to indictment. This was mentioned by an analyst for Barclays PLC, Meredith Adler. She said that those who are currently buying shares from Herbalife must wait for further developments before making a decision. With this alleged investigation going on, stocks of Herbalife in the Cayman Islands have dropped 14 percent. This was the biggest drop since after Ackman expressed his sentiments in public in 2012.