Herbalife faces fresh headache as expose hits theaters in March

“Betting on Zero,” a documentary film that chronicles alleged victims of Herbalife Ltd., will hit U.S. theaters in less than two months, bringing a fresh challenge to a company that just announced a new federal investigation.

The movie, which had screenings on the festival circuit last year, will open on March 10, according to a statement. Gunpowder & Sky Distribution has secured showings in Los Angeles, New York, Houston and Dallas, and it’s in talks to expand the run to several more cities. On April 7, the film will be available via video-on-demand and online platforms such as iTunes and Google Play.

The film features billionaire hedge-fund manager Bill Ackman, who began a short-selling campaign against Herbalife in December 2012 with a $1 billion wager against the stock. “Betting on Zero,” may help his cause by spreading allegations that Herbalife is an illegal pyramid scheme to a wider audience.

The movie’s release comes as Herbalife is attempting to comply with a Federal Trade Commission settlement that followed an investigation spurred by Ackman. The agency’s order goes into effect in May. Last week, the Los Angeles company also disclosed a separate probe by the U.S. Securities and Exchange Commission into its anti-corruption compliance in China.

Herbalife has pushed back against the documentary with a website that criticizes the film. A lobbying firm working for Herbalife also bought half the tickets for a screening — in what the filmmakers viewed as an attempt to keep people from seeing it.

“Betting on Zero” was financed by John Fichthorn, co-founder of Dialectic Capital Management and a critic of multilevel-marketing firms such as Herbalife. He has bet against its stock in the past but not since production on the film began, he has said. Director Ted Braun has said that he had independence from the financiers and Ackman in making the film.