Herbalife overstated member growth, cites database errors

The Los Angeles-based company cited a database error as the cause, saying "it had limited visibility into the likely rate of change" in the metric plan, which it began using last year.

Herbalife has defended its business practices, saying it is confident in the fundamentals of its business model, which it has said operates like a multi-level marketing company similar to Avon, Amway and Mary Kay.