Herbalife 4.11.

14 fbi & doj trade

Dan mccrum in London and kara scannell in new york artilce came out at 8:32pm on 4/11/14?
The inquiry may not lead to any charges. Herbalife has not been accused of any wrongdoing. Herbalifes
shares were down just over 2 per cent before the FT published news of the criminal probe and ended the
day 14 per cent lower at $51.48.

Herb said we have n knowledge of any ongoing investigaton by doj or fbi, and not
recevd any formal or informal request for info from either agency.
The ftc, which can bring civil charges, opened an inquiry into allegations what
is this compared to an investigation?
Herbalife had previously said it welcomed the ftc investigation did herb use
words investigation or is it media?
3 herb independent directors chose not to seek re-election after terms expired. - is
not like they quit. And what would it matter, if they were of fault prior.
http://www.ft.com/intl/cms/s/0/cdde3864-aa0e-11e3-8bd600144feab7de.html#axzz2ycsO91DW March 12 2014 us ftc has opened a formal
investigation. The probe comes after a year in which consumer groups and
memebrs of congress have echoed the call for an ftc investigation. Following the
statement herb shares tumbled 17%. Process of investigation typicaly takes 12-18
months
has ackman donated money or paid lobbyist?
Last week the company retained SDK Knickerbocker, a public relations company
which specialises in crisis management and political campaigning. A prominent
partner at the firm is Jennifer Cunningham, ex-wife of New York attorney-general
Eric Schneiderman.
http://www.latimes.com/business/money/la-fi-mo-herbalife-criminal-probe-shares-tumble20140411,0,687262.story#axzz2yd2gLsVQ The FBI has launched a criminal investigation of Herbalife and
its web of independent distributors, a federal law enforcement source told The Times.
A federal law enforcement official in New York confirmed Friday that the FBI had opened an inquiry into
Herbalife but did not know first-hand the extent of the investigation. I cant give any guidance on where
its headed, the official said.
The official asked not to be identified because he was not authorized to speak about publicly about the
investigation, which was first reported by the Financial Times.
At the FBI, Christos Sinos, a supervisory special agent, did not deny that an inquiry was underway. Rather,
he said simply, We are not commenting.

http://www.latimes.com/business/money/la-fi-mo-herbalife-criminal-probe-shares-tumble20140411,0,687262.story#ixzz2yd3FNygu

http://www.bloomberg.com/news/2014-04-11/herbalife-marketing-tactics-said-to-be-probed-byfbi.html?cmpid=yhooThe FTC had been asked by Senator Edward Markey, a Massachusetts Democrat, to
look into Herbalifes business practices, and an advocacy group called the League of United Latin
American Citizens also had met with agency Chairwoman Edith Ramirez to describe alleged abuses by the
company. The New York Times has reported that Ackman had donated $10,000 to the advocacy group and
hired a former aide to Markey as part of his anti-Herbalife campaign. Ed Markey won a special election to
the Senate on June 25, 2013. Previously he served in the House from 1976 to
2013.https://www.govtrack.us/congress/members/edward_markey/400253 - he not on any significant
subcmitees

http://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will-fail-then-ackmanlobbying-to-bring-it-down.html?_r=0 So far, Mr. Ackman has persuaded four members of Congress, a New
York State senator, a City Council member in Boston, the majority leader of the Nevada Senate and other
elected officials in California to join the cause. Prominent consumer advocates in Washington, as well as
leaders of well-respected Hispanic and African-American community groups who have been lobbied by
Mr. Ackmans team, have also written regulators demanding action.
From there, his team worked to create outside pressure, assigning lobbying, public relations and so-called
grass-roots advocacy teams to attempt to build support across the country.

http://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will-fail-then-ackmanlobbying-to-bring-it-down.html?_r=0The team includes lobbying firms run by two former members of

Congress: Toby Moffett, a Democrat who once represented Connecticut, and Robert S. Walker, a
Republican from Pennsylvania. Mr. Ackman also hired firms run by former top White House aides for
President Obama and President Clinton. Jim Papa, who handled legislative affairs for the Obama White
House, also joined the effort, with his firm, Global Strategy Group, a longtime consultant to Mr. Ackman.
In some cases, the hiring was even more strategic. In Massachusetts, Mr. Ackmans firm hired the lobbyist
Larry Rasky, who was an aide to Senator Edward J. Markey, Democrat of Massachusetts, when Mr.
Markey was a member of the House. Another lobbyist, Malcolm Grace, is a former aide to Ms. Snchez.
Both Mr. Markey and Ms. Snchez would ultimately play critical roles in the effort.
In Washington, Mr. Ackmans efforts bore fruit on Jan. 23, when Mr. Markeys office, which Mr. Ackman
had lobbied himself and which had been provided with detailed information about Herbalife by Mr.
Ackmans team, sent letters to the S.E.C. and F.T.C., calling for investigations of the company. A little
more than a half-hour after the stock began trading that day its value fell by 14 percent.
The Nevada attorney general, Catherine Cortez Masto, was among the many officials who found herself
enmeshed in the debate. But as the fight unfolded, with Latino groups holding a news conference in East
Las Vegas demanding that she investigate Herbalife, she had some questions.
She says she was struck by the appeals for an investigation of Herbalife, at first directly from
representatives for Mr. Ackmans firm and then from others: All three of the letters from nonprofit groups
demanding an investigation were identical except they were signed by three different Hispanic
community leaders, each on a different letterhead.
When Ms. Masto invited the Hispanic leaders to meet with her individually, none of them could identify a
victim of abusive practice
So Global Strategy Group, a consulting firm helping Mr. Ackman conduct the campaign, began to make
such payments, including about $120,000 to the Hispanic Federation and another $10,000 to Make the
Road New York.

Ackman says his analyst Shane Dinneen who was responsible for the disasterous
short bet against Herbalife has left the company with a glowing recomendation from
Ackman who has tried his best to retain him. In the UK we call this being kicked out
on your ass for losing $800m although 'I'll give you a good reference if you dont sue
me'. So one down one new recruit to go Senator Markey. What role is he playing in
this game, head of Pershings gullibility department perhaps.

Herbalife, after Mr. Ackman announced his bet, had already expanded its own lobbying team, hiring,
among others, the Glover Park Group, founded by former top Clinton administration aides, and the Podesta
Group, run by Tony Podesta, who is known for his close ties to the Obama White House. With help from
this team, last month the company held a private briefing for more than 30 Capitol Hill aides, defending
itself against Mr. Ackmans charges and the echo chamber they argue he has manufactured.
They also retained the law firm Dickstein Shapiro, which has a large practice that specializes in lobbying
attorneys general around the United States. Herbalife was so determined to force Mr. Ackman to back
down it asked an investment adviser it retains, Moelis & Company, to approach some of the investors in
Mr. Ackmans fund, suggesting that his bet was dangerous and could cost them dearly.

Defending Herbalife has been Icahn, who in early 2013 disclosed hed taken a stake in the
nutrition company and said he would discuss strategic alternatives with its management, which
works from an office in Los Angeles. Icahn has since increased his stake to 17 percent, according
to data compiled by Bloomberg. Herbalife said last month that it would nominate three board
members picked by Icahn

http://health.yahoo.net/news/s/nm/fbi-conducting-a-probe-into-herbalifesourceThe source said that the investigation has been going on for some time.
Former Herbalife distributors have told Reuters that they had been contacted by
agents who were interested in finding out more about the company's business
practices.

http://www.valuewalk.com/2014/04/herbalife-stock-plummets-ahead2020-expose/. Fox Business News journalist Charlie Gasparino tweeted that

ABCs 20/20 intended to run a segment making similar allegations to those of
hedge fund manager Bill Ackman, specifically that the company makes
fraudulent claims to recruit distributors and acts more like a pyramid
scheme than a legitimate business. Gasparino is quick to clarify that none of
this is certain because the story might not run for any number of reason (he
also isnt accusing Herbalife of anything), but people at Herbalife Ltd.
(NYSE:HLF) have heard that the possible whistleblower is someone who has
worked behind the scenes (so not just a disgruntled distributor whose
venture didnt work out) and that this person is cooperating with the Federal
government. Company officials at Herbalife are bracing for a 20/20 expose
on the company, Gasparino said on Fox Business News, who heard about the
segment from people at Herbalife Ltd. (NYSE:HLF) who had been
interviewed. 20/20 is looking at how Herbalife recruits its distributors, and
that is at the heart of both Ackmans critique of the company that its a
pyramid scheme and the Federal Trade Commission investigation.
Gasparino is quick to clarify that none of this is certain because the story
might not run for any number of reason (he also isnt accusing Herbalife of
anything), but people at Herbalife Ltd. (NYSE:HLF) have heard that the
possible whistleblower is someone who has worked behind the scenes (so
not just a disgruntled distributor whose venture didnt work out) and that
this person is cooperating with the Federal government.
Gasparino tweets
After months the FBI has found NOTHING re $hlf just a thought: u wld think
after everything thrown at HLF they wld have something by
nowhttps://twitter.com/CGasparino/status/4547235461417000961:51
PM - 11 Apr 2014

FBI looking at $HLF for months but investigation has turned up nothing
substantial no case to be made as of now says law enforecment source1:33
PM - 11 Apr 2014

pretty sure @FoxBusiness beat @Ft easily on HLF news today so decline
occurred waay before this alleged FBI investigation

one note of caution on the @ABC2020 $hlf expose: theyre not exposes
UNTIL they air and this one has taken months

FBI usually alerts targets via subpoenas tho it is possible agents are asking
distributors questions about business model
http://www.foxbusiness.com/industries/2014/04/11/herbalife-tumbles-asfbi-probe-comes-to-light/Herbalife is also facing a probe by the Federal
Bureau of Investigation. Gasparino cited a senior law enforcement source as
saying the FBI has been looking at the company for several months, but the
investigation has turned up nothing substantial.
Sec started an investigation jan 2013. Results?

Ackman asking sec to look into soroshttp://www.businessinsider.com/ackman-lawyers-on-soros-hlfinvestment-2013-7Soros investment represents less than 5% of outstanding shares of Herbalife or
securities rules would have forced his fund to disclose the size of the position with the regulators. However,
if his fund purchased shares in concert with other investors, or as a common group, that could also
prompt a filing of a shared position, securities lawyers say.No such filing has been made so far. Lawyers
for Ackman are prodding the SEC to investigate whether such a shared position exists and whether the
leaking of Soros' position constitutes stock manipulation, according to people with knowledge of the
matter.http://www.businessinsider.com/ackman-lawyers-on-soros-hlf-investment-2013-7#ixzz2yeUMNjIC
Herbalife puts

http://www.forbes.com/sites/nathanvardi/2014/03/18/bill-ackmans-herbalifeshort-bet-gets-30-percent-better/Now things are starting to go Ackmans way. Still,

its unclear how close Ackman is to approaching the break-even point of his
Herbalife investment. Ackman recently told his investors that he first started betting
against Herbalife on May 1, 2012, when the stock plunged to $56.30 after hedge
fund manager David Einhorn asked Herbalifes management tough questions on a
conference call. On the surface, however, it seems like much of Ackmans short trade
was put on at a lower level of between $45 and $50. In addition, the company has
been paying 30 cents per share in dividends each quarter. With the threat of a short
squeeze looming, Ackman also announced last fall that he had restructured his
Herbalife short promotion, covering more than 40% of his short position, some 8
million shares, in order to mitigate the risk of further mark-to-market losses on
Herbalife. Instead, Ackman has purchased put options and other derivatives that he

has described as long term in nature. Shares of Herbalife closed at $53.50 on

Monday. One thing is certain: the Herbalife short bet is seriously helping Ackmans
hedge fund returns in 2014. How do I know he has the puts?
10/3/13Activist investor Bill Ackman has swapped more than 40% of his $1 billion Herbalife equity short
for put options, the New York Post's Michelle Celarier reports citing Pershing Square's latest investor letter.
Read more: http://www.businessinsider.com/bill-ackman-repositions-herbalife-short-201310#ixzz2yeWl1RjC
"In order to mitigate the risk of further mark-to-market losses on Herbalife, in recent weeks we have
restructured the position by reducing our short equity position by more than 40% and replacing
it with long-term derivatives, principally over the counter put options. The restructuring of the position
preserves our opportunity for profit--if the Company fails within a reasonable time frame we will make a
similar profit as if we had maintained the entire initial short position-while mitigating the risk for further
substantial mark-to-market losses-because our exposure on the put options is limited to the total premium
paid. In restructuring the position, we have also reduced the amount of capital consumed by the
investment from 16% to 12% of our funds." So essentially what he did here was recognize losses and cover
$400 million worth of Herbalife stock and then buy puts.
how can he go from saying hlf is 100% pyramid skeem then cover short then buy puts. "Since our
presentation on Herbalife at the end of last year, we have not learned any facts that our inconsistent with
our belief that the Company is a pyramid scheme that engages in unlawful and deceptive marketing
practices," Ackman wrote in the letter, which was posted by the NYPost.

Problems with misleading statements Another reason regulators have become

interested in Herbalife Ltd. (NYSE:HLF) is because of concerns that the companys distributors may
be making misleading statements about how much money people can earn by selling the product.
Videos of Carla Berg and of Burton show some pretty extreme comments about how much money
they were able to make. Pershing notes again that the statements they made are nowhere near
typical, according Herbalifes own filings and statements. If the entire case is about misleading
statements..they wont get shut down.

On Jan. 9 at 2:50 p.m. ET, 25,000 of the January 2015 50-strike puts in Herbalife
were bought for $7.25 each; at about the same time on Jan. 10, 20,000 more were
purchased for slightly less.
http://www.bloomberg.com/news/2013-10-03/herbalife-drops-as-short-squeezerisk-recedes-with-ackman-puts.htmlPershing Square was looking to protect itself
against a short squeeze, Ackman wrote. In a short sale, an investor borrows stock
and then sells the shares in anticipation of returning them at a lower price in the
future. A short squeeze occurs when other investors begin buying the same stock,
pushing its price up and forcing the short seller to buy back the shares, possibly at a
loss. How would he be squeezed if going to hold it for long term?
http://www.zerohedge.com/news/2013-10-02/ackman-books-herbalife-lossesforced-cover-40-short-avoid-being-forced-cover-short - good article talking about
ackman puts

ackman media and conferences

ackman first discussing his short We highlighted at the Value Investing Congress how
Ackman teased the crowd that he had a new short position but did not reveal it. He gave a hint in
this interview, saying: "it's a good for America short ... as soon as the company goes out of
business, the country will be better off." Read more:
http://www.marketfolly.com/search?q=bill+ackman#ixzz2yekmUss9

ira sohn http://www.marketfolly.com/2013/11/bill-ackmans-newherbalife-presentation.html november 26 2013

Slideshow uses ftc vs fortune hi tech case. Wha were here retail sales?

He uses quote from league of united latin America citizens

List people asking for investigation

einhorn asked in may 2012 what was retail levels sales. President said
around 70%. Day after they released 8k changing his answer.
https://www.sec.gov/Archives/edgar/data/1180262/00012999331200104
6/htm_44925.htm. This is fucking misleading. Ackmans slideshow only gives
alittle bit of info. How did it change its answer?

Pershings squares 2013 q2 letter on first page the media attention is a

natural outcome of our high profile strategy. Over time, the medi has been
helpful in our engagements with our portfolio companies, and we expect the
firms visability to continue to be a sustainable competeive advantage.