Herbalife Ltd. HLF 0.31% shares soared 12 percent on Friday after the company reached a $200 million settlement with the Federal Trade Commission related to deceiving customers. Clearly the market is interpreting the settlement as good news, but traders and the media may be making some premature assumptions.

A number of media outlets, such as CNBC, are reporting the FTC ruled Herbalife is not a pyramid scheme. In reality, the word “pyramid” doesn’t appear anywhere in the FTC’s official press release.

In fact, in a press conference this morning, a FTC spokesman said Herbalife was “not determined not to be a pyramid.”

“Herbalife is…

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