Illinois investigates Herbalife as federal, state probes grow

(Reuters) – Illinois Attorney General Lisa Madigan’s office said on Thursday it is investigating Herbalife, joining other state and federal probes of allegations that the weight loss and nutrition company is running a pyramid scheme.

Herbalife shares were trading down 1.33 percent at $54.53 after the news, reversing earlier gains.

Madigan’s office was urged to look into the company months ago by civil rights groups, which claimed it was a pyramid scheme targeting minorities. Hedge fund manager William Ackman was the first to call Herbalife a fraud and placed a $1 billion bet against the company in 2012.

The company denies the allegations, and high-profile investors such as Carl Icahn, George Soros and Dan Loeb have supported the company in the past by taking stakes.

Herbalife did not immediately respond to requests for comment.

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