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Herbalife Ltd. (HLF-NYSE) shares got the smack down Thursday after Democratic Senator Edward Markey from Massachusetts announced he had written to the U.S. Securities and Exchange Commission Chair Mary Jo White, Federal Trade Commission Chair Edith Ramirez and Herbalife directly in an attempt to obtain more information about the business practices of the company. Herbalife shares were off by 10% or lower by almost 8 points at the closing bell. He requested a response by February 28. Markey, a member of the Commerce, Science and Transportation Committee, said in a press release, "There is nothing nutritional about possible pyramid schemes that promise financial benefit but result in economic ruin for vulnerable families."

Markey request comes after receiving a series of "serious complaints of improper pressure and financial hardship" from constituents who claim to have lost thousands of dollars buying supplies that they could not sell to customers. He said one family in Norton told him they lost $130,000, including their entire 401(k) retirement account, from investing with the company. According to the press release, another woman said she was pressured to recruit family members and spend more money to buy more products so that she could qualify as a "supervisor" in the Herbalife system. In the press release Markey said, "Herbalife may be a purveyor of health and wellness products, but some of its distributors are suffering serious economic ill-health as a result of their involvement in the company. I have serious questions about the business practices of Herbalife and their impact on my constituents, and I look forward to receiving responses to my inquiries." Markey said in his letter that he wanted regulators to "confirm that the company is acting in accordance with the federal securities laws under the authority of the Commission." Additionally, he asked Herbalife to say whether or not it is targeting minority communities.

William Ackman backed his accusation that Herbalife is a pyramid scheme with a $1 billion short bet that the companies share price would drop to zero under regulatory scrutiny and began approaching lawmakers and regulators with his evidence.

Carl Icahn along with other major investors have lined up against Ackman's bet by taking stakes in the company, making Herbalife shares some of the most closely watched on Wall Street. During 2013, Herbalife's share price surged 139% however, for year 2014 to date, share price has fallen 16.6%.

Herbalife has vehemently denied the accusations with spokeswoman Barbara Henderson reportedly saying that the company received the letter and looks "forward to an opportunity to introduce the company to him and address his concerns at his earliest convenience."

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