FBI eyes H’life stock manipulation: report
The FBI and other federal authorities have interviewed people hired by activist investor Bill Ackman as part of a probe into potential manipulation of Herbalife stock, according to a report.
Ackman, founder of the Pershing Square hedge fund, has pushed a $1 billion, more than 2yearlong campaign against the nutritional shake maker.
Neither Ackman nor Pershing Square is under investigation, but the FBI and prosecutors from Preet Bharara’s US Attorney’s office in Manhattan have conducted interviews and sent out document requests in connection with the probe, according to a report in the Wall Street Journal.
The probe is looking into whether people, including some hired by Ackman, made false statements to regulators and others about Herbalife’s business model, the Journal reported.
The false statements were made to spur investigations into Herbalife and lower its stock price, according to the report, which cited people familiar with the matter.
Ackman’s $1 billion short bet against Herbalife — based on accusations that it is a pyramid scheme — profits as the stock declines.
Herbalife has steadfastly denied it is a pyramid scheme.
The Federal Trade Commission announced a probe of Herbalife a year ago — and the company’s shares have fallen 48.6 percent since.
Dozens of Herbalife distributors who claim they lost money selling the shakes also complained to the FTC which, along with the SEC, is probing the company.
Pershing Square, through a statement, said it is “proud of our work … exposing the pervasive victimization by Herbalife of millions of people and would welcome any scrutiny of those efforts.”
Pershing has never paid people to write letters to the FTC, it has maintained.
The FBI and Bharara’s office declined to comment.