NEW YORK--(BUSINESS WIRE)--Pershing Square Capital Management CEO Bill Ackman this morning sent the following letter to Pershing Square investors in response to yesterday’s article in The Wall Street Journal regarding Herbalife.
Dear Pershing Square Investor:
Yesterday afternoon The Wall Street Journal reported, according to unnamed sources, that in connection with a market manipulation investigation:
Prosecutors in the Manhattan U.S. attorney’s office and New York field office of the FBI have conducted interviews and sent document requests in recent months in connection with the investigation, which is looking into whether people, including some hired by Mr. Ackman, made false statements about Herbalife’s business model to regulators and others in order to spur investigations into the company and lower its stock price, the people said. Mr. Ackman’s firm, Pershing Square Capital Management LP, has made a huge bet on Herbalife shares declining.
One of the people familiar with the matter said investigators are scrutinizing public statements and allegations relayed to regulators by the array of consultants and activists who have lobbied against Herbalife, as well as any connections or potential collaboration between those people and Pershing Square.
Neither Mr. Ackman nor Pershing Square has been served with a subpoena or been visited by FBI agents in connection with the probe, another person familiar with the matter said. The investigation could end with no charges being filed.
Since our initial presentation on Herbalife, Herbalife has been petitioning the government to investigate Pershing Square in connection with our short position in the company. We are not aware of any statements that we have made that are untrue, nor are we aware of any unlawful conduct on our part or by any consultants that we have hired.
According to press reports, the government’s inquiry concerns “market manipulation.” According to the SEC:
Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock. They include: spreading false or misleading information about a company; improperly limiting the number of publicly-available shares; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security.
At no time have I or Pershing Square intentionally made any false or misleading statements about Herbalife. We have publicly issued numerous presentations, white papers and analyses, which are available on the www.factsaboutherbalife.com and www.herbalifepyramidscheme.com websites. Video and audio recordings of our public presentations are available on these websites for anyone including the government to review, and we have encouraged regulators to do so. We have also voluntarily provided additional information about Herbalife to various U.S. authorities.
It is Pershing Square’s long-standing policy to cooperate fully with any requests from any government agency for documents or for interviews.
According to press reports and Herbalife’s own SEC filings, the company is currently under investigation by the Department of Justice, FBI, SEC, and Federal Trade Commission. According to its SEC filings, Herbalife has spent more than $15 million in the last three quarters since the FTC launched its investigation in responding to their requests and an additional $54 million responding to our criticisms of Herbalife’s business and in lobbying the government in an attempt to avoid being investigated. We look forward to the conclusions of the government’s investigations into Herbalife.
Please feel free to contact our investor relations team or Steve Fraidin, Vice Chairman of Pershing Square, if you have any questions about any of the above.
William A. Ackman
Pershing Square Capital Management, L.P.
888 Seventh Avenue, 42nd Floor
New York, NY 10019
About Pershing Square Capital Management, L.P.
Pershing Square Capital Management, L.P. ("Pershing Square"), based in New York City, is a SEC-registered investment advisor to private investment funds. Pershing Square manages funds that are in the business of trading — buying and selling — securities and other financial instruments. Funds managed by Pershing Square are short the stock of Herbalife Ltd and own put options on the Company. Pershing Square may increase, decrease, dispose of, or change the form of its investment in Herbalife for any or no reason, at any time. Pershing Square may change its views about or its investment positions in Herbalife at any time, for any reason or no reason. Pershing Square may buy, sell, cover or otherwise change the form or substance of its Herbalife investment. Pershing Square disclaims any obligation to notify the market of any such changes. Please see the full Disclaimer appearing on website www.factsaboutherbalife.com and www.herbalifepyramidscheme.com.