In a conference call with reporters, Ms. Ramirez said Herbalife had been "deceiving hundreds of thousands of hopeful people" with the belief they could get rich. But she would not say whether or not the company was a pyramid scheme as Mr. Ackman has claimed. The commission's "focus wasn't on a particular label," Ms. Ramirez added.
The complaint filed on Friday by the F.T.C. against Herbalife in federal court in Los Angeles does call into question some of the company's longstanding distribution practices and ways it generates revenue by relying on customers to sell products to friends and relatives. The complaint says, "the overwhelming majority of Herbalife distributors who pursue the business opportunity make little or no money and a substantial percentage lose money."
The agreement with the F.T.C. will require Herbalife to overhaul its system for compensating its customers and recording sales of its supplement drinks and other food products. Over time, the structural changes mandated by the F.T.C. in the settlement and civil complaint could have a long-term impact on Herbalife's profitability.
The settlement with the F.T.C. "does not change our direct-selling business model and will set new standards for the industry," a spokesman for Herbalife said in a statement. "We agreed to the terms and to pay $ 200 million because we simply wanted to move forward with our mission."
The company also took a swipe at Mr. Ackman in its statement, saying it had been "under attack by an intransigent short-seller hellbent on a misinformation campaign designed to destroy our company."
Mr. Ackman was noticeably low-key after the announcement of the settlement. His firm released a statement in which it insisted Herbalife's business model would fail once the company institutes the structural changes required by the settlement.
"We expect that once Herbalife's business restructuring is fully implemented, these fundamental structural changes will cause the pyramid to collapse," the statement said.
Mr. Ackman's contention that Herbalife is an unlawful pyramid scheme has focused on the company's sales practices. The company relies on independent resellers who are rewarded for recruiting new members, and Mr. Ackman argued that these recruitment efforts were more lucrative than the sale of its products.
In the near term, the settlement will be bad news for investors in Mr. Ackman's hedge fund who have lost money investing in his fund over the last year and a half. While Mr. Ackman has restructured the bet against Herbalife — known as a short — reducing it by more than 60 percent, he still has exposure. And he has spent more than $ 50 million on research and legal fees for his campaign against the company
So far this year, Mr. Ackman's Herbalife bet has lost him 11 percent, according to his most recent investor update. His Pershing Square Holdings fund is down 19.1 percent. In a separate note to investors on Friday, Pershing Square said Herbalife was trying "to spin the settlement remarkably as somehow an endorsement of their business model" and that over the long haul the outcome would be "materially positive for our short position."
Herbalife said on Friday that it would let Mr. Icahn increase his ownership stake to as much as 35 percent from the 18 percent of the company's outstanding shares he currently holds. The move could set the stage for Mr. Icahn and others to take Herbalife private, an action that would make it difficult to determine the economic impact of the changes in business practices on Herbalife's bottom line.
In a statement, Mr. Icahn said he would "consider a range of strategic opportunities, including potential roll-ups involving competitors, as well as other strategic transactions."
Mr. Icahn also wasted no time to gloat over his victory.
"Unlike many of those that 'shorted' Herbalife, we did not rely on one or two research papers prepared by nonexperts," Mr. Icahn said his statement Friday morning.
"While Bill Ackman and I are on friendly terms, we have agreed to disagree (vehemently) on this subject," Mr. Icahn said, adding that the F.T.C.'s settlement "vindicates our research and conviction."
It was almost two years ago to the day that Mr. Icahn and Mr. Ackman hugged and made up publicly on stage at an investor conference in Manhattan. "It's not about winning," Mr. Ackman said at that conference on July 16, 2014. But, he added, "I would love to get Carl out of this stock."
After Friday's settlement that possibility looks less likely than ever.
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