Ackman says he hasn't been subpoenaed over Herbalife

AP News
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Posted: Mar 13, 2015 12:04 PM

NEW YORK (AP) — Activist investor Bill Ackman said Friday that he has not received any subpoenas to testify about possible market manipulation of Herbalife stock.

Ackman, who made the comments during a telephone interview on CNBC, runs Pershing Square Capital Management LP. He has bet heavily against Herbalife's stock, describing it as a pyramid scheme, a characterization that the seller of supplements and weight-loss products rejects.

The investor's comments come after The Wall Street Journal reported that federal prosecutors and the Federal Bureau of Investigation are looking into potential manipulation of Herbalife's stock and have talked to people hired by Ackman.

Ackman said that he is aware that a firm Pershing has hired, Global Strategy Group, has received subpoenas and some individuals there have been interviewed. But he said he has not been subpoenaed.

Ackman maintained his view that Herbalife Ltd. is a pyramid scheme — making money by recruiting more salespeople instead of through selling products — and stood by the research his firm has conducted.

"We don't need to make false statements about Herbalife," he said.

Ackman sent a letter to investors Friday that said he, nor Pershing Square, "intentionally made any false or misleading statements about Herbalife."

"We have publicly issued numerous presentations, white papers and analyses," he said.

Late Thursday Herbalife released a statement saying that Ackman has "a direct financial interest in hurting our company." The company said that it's confident in the strong fundamentals of its business model.

Herbalife did not immediately respond to a request for comment on Friday on Ackman's latest comments.

The company's shares rose $4.48, or 13.8 percent, to $37.73 in midday trading. Its shares are down about 34 percent over the past year.