Herbalife charged with deceptive practices, agrees to $200 million settlement, changes


The siege of Herbalife
Do Not Send Email Notifications. They are vitamin D from sun but not from tanning beds see also here , here , here , here , here , here , here and vitamin B12 see also here , here , here , here , here. After his original presentation, Ackman put on three more. Yes, the list puzzled us too. If Einhorn was contemplating a public short, DeSimone says, he felt that was material information the public ought to have.


It’s no longer business as usual at Herbalife: An inside look at the $200 million FTC settlement

As the DSA explains it:. Compensation must primarily be based on the sale of products and services to the ultimate consumer—whether or not that consumer is also a seller of the products. Finally, I was disappointed in one area where Ackman used deception to try to make it look like Herbalife CEO Michael Johnson was illicitly selling his stock in the company.

During his presentation, Ackman asserted that Johnson was selling stock as the company was executing a buyback after the stock plunged in May. This is patently false — Johnson sold stock before the big drop in May. Ackman also presented this slide, which in my opinion is clearly meant to insinuate some sort of wrongdoing by the CEO or some sort of knowledge of pending doom on the part of the CEO. Actions Speak Louder Than Words:.

In other words, Johnson set up a plan that sells his stock automatically based on certain thresholds and criteria. As far as I know, the details of the plan are not public, but they would typically be triggered by the stock trading at a certain price for a certain amount of time, and would lay out strict details for the amount of stock to be sold when criteria are met.

The guy got paid a ton of money — a lot of it was in stock — he wanted to capture some of that. Also, Johnson continues to own a lot of stock — more than , shares or in-the-money-options to buy stock.

I should also mention that there appears to be some confusion about the bottom line here. Readers should have no expectation that they will be kept up to date on my positions. Kid Dynamite is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. Herbalife also countered that Ackman based his accusations on a misunderstanding of the company's distributor base. At an investor conference in January , the company released results of a Nielsen Research International survey showing 73 percent of Herbalife distributors never intended to make money by reselling the product.

Instead, they wanted to buy products at a discount for personal use. Shortly thereafter, Icahn bought shares of Herbalife Intl. As Icahn continued to buy up HLF shares, the stock price continued to show strength. In March , Federal prosecutors and the FBI revealed that they were investigating whether or not individuals paid by Ackman and otherwise had made false statements about Herbalife's business model to regulators and others in order to lower the company's stock price and influence authorities to conduct an investigation.

In November , Ackman closed out his short position replacing it with a less aggressive put option. In March , the FTC opened an investigation into Herbalife in response to calls from consumer groups and members in both houses of Congress.

We are confident that Herbalife is in compliance with all applicable laws and regulations. The documentary Betting on Zero is about Herbalife, exploring the allegation from Bill Ackman that the company is a pyramid scheme and personal stories of Herbalife distributors who have lost their life savings due to the company. Filmmaker Ted Braun says that he "was making a film that looked at all sides," but believes that "the company instructed them [current Herbalife distributors] not to talk.

Oliver criticises Herbalife for its exploitation of Latino communities, [] and overstatement of their product's health benefits. The book When The Wolves Bite: From Wikipedia, the free encyclopedia.

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