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Supplement company Herbalife sees pyramid-scheme suit tossed

FILE- This Feb. 6, 2012, file photo shows Bill Ackman of Pershing Square Capital Management in Toronto. A judge dismissed a lawsuit Tuesday, March 17, 2015, by Herbalife shareholders who claimed that the business structure and marketing practices of the weight loss and nutritional supplements company violated the law and that they lost money because it amounts to a pyramid scheme. Plaintiffs did not show that accusations by activist investor Bill Ackman proved fraud by Herbalife, U.S. District Judge Dale Fischer in Los Angeles wrote in his ruling. (AP Photo/The Canadian Press, Pawel Dwulit, File)
FILE- This Feb. 6, 2012, file photo shows Bill Ackman of Pershing Square Capital Management in Toronto. A judge dismissed a lawsuit Tuesday, March 17, 2015, by Herbalife shareholders who claimed that the business structure and marketing practices of the weight loss and nutritional supplements company violated the law and that they lost money because it amounts to a pyramid scheme. Plaintiffs did not show that accusations by activist investor Bill Ackman proved fraud by Herbalife, U.S. District Judge Dale Fischer in Los Angeles wrote in his ruling. (AP Photo/The Canadian Press, Pawel Dwulit, File) FILE- This Feb. 6, 2012, file photo shows Bill Ackman of Pershing Square Capital Management in Toronto. A judge dismissed a lawsuit Tuesday, March 17, 2015, by Herbalife shareholders who claimed that the business structure and marketing practices of the weight loss and nutritional supplements company violated the law and that they lost money because it amounts to a pyramid scheme. Plaintiffs did not show that accusations by activist investor Bill Ackman proved fraud by Herbalife, U.S. District Judge Dale Fischer in Los Angeles wrote in his ruling. (AP Photo/The Canadian Press, Pawel Dwulit, File)

By Associated Press 3 min read

LOS ANGELES (AP) – A judge dismissed a lawsuit by Herbalife shareholders who claimed that the business structure and marketing practices of the weight loss and nutritional supplements company violated the law and that they lost money because it amounts to a pyramid scheme.

Plaintiffs did not show that accusations by activist investor Bill Ackman proved fraud by Herbalife, U.S. District Judge Dale Fischer in Los Angeles wrote in his ruling Tuesday.

Ackman, who runs Pershing Square Capital Management, bet heavily against the company’s stock, describing Herbalife as a pyramid scheme.

Because no fraud was proven, the judge said, the shareholders can’t show that losses they suffered were caused by the company’s perceived misrepresentations.

Herbalife said it welcomed the judge’s decision.