Explaining the Herbalife 'controversy'

Herbalife reported earnings on Monday that fell short of analysts' expectations. This is good news for hedge fund manager and activist investor Bill Ackman of Pershing Square Capital Management, who has been asserting that the company is "incredibly fraudulent" and about to collapse.

Following continual heat from Ackman, the Federal Trade Commission began to investigate the multilevel global nutrition and weight-management company in March. Ackman has contended that Herbalife is nothing more than a pyramid scheme, and he has shorted a position in the company.

Earlier this month the fight intensified as Herbalife attacked Ackman on Twitter, calling him the "Worst of Wall Street" and continuing its claim that the firm is not a scheme and that the allegations are unfounded.