REPORT: The FTC has decided that Herbalife is not a pyramid scheme

The Federal Trade Commission has decided that Herbalife is not a pyramid scheme, according to Dow Jones.

Herbalife shares jumped by as much as 16% in premarket trading on Friday.

The FTC opened a probe into the company after hedge fund manager Bill Ackman alleged that it operated like a pyramid scheme. The company sells weight-management products through a network of independent distributors who earn sales commissions.

In July 2014, Ackman published a more than 200-page slide deck detailing why Herbalife was “the big lie.”

More to come …

NOW WATCH: A new poll suggests this is the reason Trump is tanking

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.