Beginning in early January and up until the present, we have been contacted by a number of former Herbalife Ltd. (NYSE:HLF) employees who have shared with us additional information that confirms the illegality of the Company’s business practices. We have also communicated with hundreds of former Herbalife distributors who have shared their stories of being seduced into the so-called Herbalife “business opportunity,” and manipulated into spending thousands, and often tens of thousands, of dollars on the false hopes of financial success as a distributor.


We have chosen not to disclose this information publicly in order to allow the regulators the time to do their own investigations and analysis. For this reason, at the recent Robin Hood investor conference, we were careful to limit our presentation to disclosures which would not interfere with ongoing regulatory activity. Our Robin Hood presentation described the SEC’s recent investor alert which identifies seven hallmarks of a pyramid scheme and an Herbalife Ltd. (NYSE:HLF) victim video made by Make the Road, a well-regarded Latino advocacy organization.

There has been a substantial short-term economic cost to Pershing Square

While we believe that our approach has been successful in garnering significant regulatory interest, there has been a substantial short-term economic cost to Pershing Square due to our silence. Because Pershing Square has a reputation for doing extremely thorough research, Herbalife investors incorrectly assume that we have disclosed everything negative we know about the Company’s business, particularly in light of the more than 300-page original presentation. While the original presentation was certainly comprehensive, we limited it to an introduction to Herbalife Ltd. (NYSE:HLF) and only those facts and issues that we could prove at the time, with a plan to present additional information in future presentations as we completed our research.

H/T ZeroHedge

193325846 Pershing Square December 2013 Investor Letter by