Pershing Square Capital Management, L.P. Releases Background Paper on Leslie Stanford, a Herbalife Ltd. (NYSE:HLF) Founders Circle Member Who Creates and Sells Recruiting Materials Telling Recruits They Can “Get Rich Quick”
New York, NY – February 12, 2014
As part of its continued series of in-depth studies of Herbalife’s (NYSE: HLF) deceptive practices and recruitment techniques, Pershing Square Capital Management, L.P. released today a white paper on Leslie Stanford, a key player in Herbalife’s recruitment schemes and a member of its Founders Circle.
As a pyramid scheme, Herbalife Ltd. (NYSE:HLF) relies upon such recruitment schemes to constantly replace members who drop out each year. It rewards and promotes leaders such as Leslie Stanford, who is a former Board Member of the company and at the center of its recruitment process.
Stanford runs the online recruiting business Success Connection, which sells training videos, recruiting scripts and other business tools to Herbalife distributors. Her recruitment materials make blatantly false claims about making money through Herbalife, telling recruits they can have “big money,” “fancy cars,” “nice homes,” and “travel to exotic locations.”
Herbalife Ltd. (NYSE:HLF) features Stanford at recruitment events and has given her prestigious corporate awards.
A summary outlining Stanford’s deceptive practices is attached, with extensive links to exhibits and videos documenting the allegations available on www.herbalifepyramidscheme.com
About Pershing Square Capital Management, L.P.
Pershing Square Capital Management, L.P., 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 have established short and other bearish economic positions against securities of Herbalife Ltd. 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.
|Dates of Herbalife Distributorship: 1981 – presentStatus in Herbalife: Founder’s Circle (current), Herbalife Board of Directors (2002-2005)
Business Methods: Training Videos, Calls and Presentations; Recruiting Scripts; Distributor Website Registrations
All statements in this report are made pursuant to Pershing Square’s disclaimer, available athttp://factsaboutherbalife.com . Extensive profile and source material available at www.herbalifepyramidscheme.com
- · Over the course of the last thirty years, Leslie Stanford has risen to the very top of the Herbalife pyramid. From 2002 to 2005, she was a member of Herbalife’s board of directors, and she remains a member of the Herbalife Founder’s Circle, the highest level of the Herbalife scheme.
- · Stanford achieved success by running the online recruiting business Success Connection, which sells training videos, recruiting scripts and other business tools to Herbalife distributors. Stanford runs the Success Connection with John Tartol, who is also a senior distributor and a current member of the Herbalife Board of Directors.
- · Success Connection sells recruiting scripts that help Herbalife distributors recruit new distributors into the scheme, including by making highly misleading income claims, evading questions, and purporting to guarantee success. Success Connection promotional materials are replete with deceptive testimonials, including from Stanford herself, telling recruits that they too can have “big money,” “fancy cars,” “nice homes,” and “travel to exotic locations.”
- · Stanford appears in videos promoting the Herbalife business opportunity, in which she tells prospective recruits that she is making millions with Herbalife and that distributors who have not even signed up yet can make even more. Indeed, she tells distributors there are “no limits” to the amount of money they can make with Herbalife. In these videos, Stanford puts considerable pressure on distributors to order large volumes of Herbalife products so as to qualify as a Supervisor as quickly as possible and become eligible for recruiting rewards, and to pressure their downline distributors to do the same.
- · Stanford also appears in videos promoting the Success Connection, in which she emphasizes the importance of recruiting new distributors into the scheme and tells distributors it is “absolutely realistic” for them to expect to earn more than a hundred thousand dollars per year. In reality, only three-hundredths of one percent of Herbalife distributors in the U.S. earn $250,000 per year in payments from Herbalife, while 88% of U.S. distributors earn $0 per year in payments from Herbalife.
- · Herbalife Ltd. (NYSE:HLF) features Stanford at its events and in publications sponsored by the company and has given her prestigious Herbalife awards and large discretionary Mark Hughes bonuses.