The Federal Trade Commission has opened a formal investigation into Herbalife's operations Wednesday, pushing shares of the nutrition and weight loss company sharply lower.



Shares of Herbalife plunged as much as 15 percent after being temporarily halted but gradually recovered from lows, ending the day down 7.3 percent. Shares were up more than 4 percent prior to the halt. A circuit breaker also briefly halted trading in shares of rival Nu Skin due to volatility.

A source familiar with the probe told CNBC that Herbalife was surprised by the investigation but thought it was the best way to combat allegations about the company's business model.

The probe is expected to last a year or more.