Ackman Made Deal With Herbalife Ltd. Exec Whistleblower

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Ackman Made Deal With Herbalife Ltd. Exec Whistleblower

It looks like Bill Ackman was not exaggerating when he said he would go to the “end of the Earth” to bring down Herbalife Ltd. (NYSE:HLF) and vindicate his short position in the company. It has been revealed yesterday that Ackman, the founder and managing partner of Pershing Square Capital Management, made a secret deal back in June of last year with a disgruntled Herbalife exec to protect him if he exposed problems in company operations.

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ABC News broke the story yesterday, April 22nd, that hedge fund manager Bill Ackman — who has a large short position in Herbalife Ltd. (NYSE:HLF) — secretly promised a disgruntled HLF executive up to $3.6 million over 10 years if he lost his job because of giving information to government investigators and the media. The deal was signed in June 2013, but the terms required both sides to keep it confidential as long as possible.

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Identity of Herbalife whistleblower released today

The name of the former Herbalife Ltd. (NYSE:HLF) exec who became a whistleblower is Giovanni Bohorquez. Bohorquez left his management position in Herbalife in late 2011. A year and a half later, the New York Times published an article about a serious problem in 2011 at an Herbalife manufacturing plant. The information in the article was based on internal documents provided by someone called a “former employee, who was granted anonymity out of fear of retribution from the company.”

Secret deal

ABC News interviewed Bohorquez and his attorney back in December of last year, and at the time they claimed Bohorquez had received no compensation (other than travel expenses and legal costs) from Ackman for his whistle-blowing activities.

In a recent follow up interview, the attorney of the former Herbalife Ltd. (NYSE:HLF) exec said interviewers “asked the wrong questions” in the first interview, and that the answers given to the questions were accurate. He said that Ackman has only paid the whistleblower $80,000 under the arrangement to date — $20,000 a month beginning in January of this year.

Bohorquez claims he lost his job managing a chain of laundromats due to the ongoing stress of the whistle-blowing situation, and that he only started taking the money promised in the agreement with Ackman after his wife also lost her job in December.

Ackman explained the agreement by saying agreed to it after Bohorquez didn’t want to go public because he feared being a whistle blower would make it hard for him to find work as an executive.

“Giovanni could not afford to take the company on. We thought his story was important,” Ackman elaborated to ABC News. “Being a whistleblower is a very dangerous thing to do if you want to get a job.”

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6 COMMENTS

  1. Probably not, they have the morals of an alley cat. They are all about making money, and couldn’t care less if people are ripped off while making it. I am educating primarily those who would otherwise be ripped off by MLMs such as Herbalife and Amway, as well as providing an opportunity for regulators to learn more about the issues.

  2. so you are going to educate George soros, carl Icahn, bill stiritz and several other billionaires who are long the stock and selling puts

  3. Mark and Susan Hill obviously don’t know me, I am an extremely happy person. I have taken responsibility for my mistake of believing very good liars, that’s why I’m here educating others about these scams.

  4. Get over it tex2. Only YOU think you are over it but your obsession is glaring. Take responsibility and ownership for YOUR mistakes that you have made. You will be a lot happier person.

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