Shares of Herbalife surged more than 11 percent in early trading Friday after disclosing that it's in advanced talks to settle a federal investigation into claims that the company essentially operates as a pyramid scheme.

It's a claim that has dogged the company for years and set off what has become an epic battle with activist investor Bill Ackman, who has been waging a campaign against Herbalife since late 2012.

Herbalife, which sells supplements and weight-loss products, said in a regulatory filing that the possible settlement with the Federal Trade Commission "would likely include a monetary payment and injunctive and other relief."

The situation is fluid, however, and a number of issues could prevent a final agreement being reached, Herbalife said in the filing late Thursday.

If talks with investigators break down, a legal fight is likely, the company said.

Bill Ackman, who leads Pershing Square Capital Management LP, opened his campaign against Herbalife on Dec. 20, 2012, announcing a massive bet against the company, and made his case in a three-hour, PowerPoint presentation.

He also released a 334-page indictment of the company, detailing operations he described as a pyramid scheme. In short, Ackman claims that the only way Herbalife makes money is by constantly recruiting more sales people, who must buy its products and then try to sell them.

Ackman is betting that that pool he describes as a pyramid scheme will dry up and with no products being sold directly to consumers, Herbalife will implode.

To date, Ackman's bet has been a spectacularly bad one.

The presentation sent Herbalife's stock of into a tailspin in the days that followed, but they've come roaring back. Shares of Herbalife Ltd. have soared 50 percent since the day before Ackman launched his fight.

Making matters worse for Ackman, other big players have waded in on the side of Herbalife, despite ensuing investigations by the FTC and the U.S. Securities and Exchange Commission.

Daniel Loeb's hedge fund Third Point disclosed a stake of more than 8 percent a month later, and investor Carl Icahn revealed he held an even bigger position in Herbalife a week later.

Herbalife has defended its practices, saying it is confident in the fundamentals of its business model, which it compares to Avon, Amway and Mary Kay.

It's also made the battle with Ackman personal, taunting him online and operating the website "The Real Bill Ackman," where it lays out of number of his other financial positions with other companies that have gone sour. There is a section on the website titled, "The Prince of Darkness."

Shares on Friday climbed $6.54 to $64.86.