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UPDATE 1-Herbalife hires new lawyer, makes personnel changes -source
June 5, 2017 / 8:27 PM / 6 months ago

UPDATE 1-Herbalife hires new lawyer, makes personnel changes -source

(Recasts to lead with new hire, adds details on other personnel changes)

By Svea Herbst-Bayliss

BOSTON, June 5 (Reuters) - Herbalife Ltd has named a new acting general counsel in a wave of management changes as the nutrition and supplements company works to comply with a legal settlement with U.S. regulators last year over deceiving customers, according to a person familiar with the hiring decision.

Rick Werber joined the Los Angeles-based company about a month ago, taking over duties previously performed by Mark Friedman, who signed a Federal Trade Commission settlement in which Herbalife avoided being labeled a pyramid scheme but agreed to change its business model in the United States. It is not clear whether Werber will take the position permanently.

Herbalife has not publicly disclosed any of the personnel changes. But its website no longer lists Friedman as a member of senior management. A person familiar with the matter said Friedman, formerly executive vice president, general counsel and secretary, now works on special projects at Herbalife.

A company spokesman declined to comment. Friedman could not be reached for comment.

Another top insider, Frank Lamberti, who served as senior vice president and managing director for North Asia since early 2016, has moved into a new role at headquarters, where his responsibilities include implementing FTC-mandated changes to the company’s business model, the person familiar with the personnel decisions said.

Werber and Lamberti previously worked with the company’s new chief executive, Richard Goudis, at vitamin maker Rexall Sundown. Goudis took over as CEO from Michael Johnson last week.

Jerry Li, who previously ran Herbalife’s China operations, and Gioji Okuhara, who had overseen Brazil, are no longer in their positions, company documents show.

In July 2016 Herbalife agreed with the FTC to restructure its U.S. business operations and pay $200 million to settle charges that it deceived customers into believing they could earn substantial amounts of money selling Herbalife products.

The settlement also required Herbalife to pay participants for products they sell, rather than for new recruits they bring in. In a recent regulatory filing, the company warned investors that changes in management could affect results.

“Our reliance upon, or the loss or departure of any member of, our senior management team could negatively impact our member relations and operating results,” it said in an 8-K filing last month, using language common to corporate filings.

Herbalife has been tangling with hedge fund manager William Ackman since 2012, when the billionaire investor put on a $1 billion short bet against the company, calling it a pyramid scheme and saying its stock price would tumble to zero.

The company’s shares ended regular trading on Monday down 6.7 percent, or $4.93, at $68.99 on the New York Stock Exchange. Earlier the company said second-quarter sales would fall more than expected.. (Reporting by Svea Herbst-Bayliss; Editing by Scott Malone and Steve Orlofsky)

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