Business

Herbalife stock falls as Senator Markey calls for probe of company

Despite criticism from Senator Ed Markey (above) and fund manager William Ackman, Herbalife has fans on Wall Street.
Despite criticism from Senator Ed Markey (above) and fund manager William Ackman, Herbalife has fans on Wall Street.Associated Press/File 2013

This is a summary. To read the whole story subscribe to BostonGlobe.com

Hedge fund manager William A. Ackman walked the halls of Congress last year, telling any lawmaker who would listen that he believed Herbalife, a nutritional supplements company, was a fraud. He finally got a break Thursday, when Senator Edward J. Markey of Massachusetts sent letters to federal regulators urging them to investigate the company.

The action introduced a political element into what has become a billion-dollar brawl among prominent investors.

Ackman contends that Herbalife is a pyramid scheme and wagered that its stock is worthless.

The company has forcefully denied Ackman’s assertions, spending millions of dollars last year to defend its reputation. And it has found champions elsewhere on Wall Street.

Herbalife stock dropped more than 10 percent Thursday after Markey’s letters were disclosed.

Full story for BostonGlobe.com subscribers.

Get the full story with unlimited access to BostonGlobe.com.

Just 99 cents for four weeks.

Share