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The Federal Trade Commission has opened a formal investigation into Herbalife (HLF)'s operations Wednesday, pushing shares of the nutrition and weight loss company sharply lower.
Shares of Herbalife plunged more than 15 percent after being briefly halted. Shares were up more than 4 percent prior to the halt. Rival Nu Skin (NUS) shares were briefly halted due to volatility circuit breaker.
Herbalife said it will fully cooperate with the FTC, saying it "welcomes the inquiry given the tremendous amount of misinformation in the marketplace."
On Wednesday, hedge fund manager Bill Ackman accused Herbalife of breaking direct-selling laws in China, its fastest-growing market.
Representatives of the FTC did not immediately respond to requests for comment. Ackman and Pershing Square also did not immediately respond to a request for comment.
(Read more: Ackman accuses Herbalife of breaking laws in China )
Ackman alleged that Herbalife was a pyramid scheme and made a bet the stock would fall.