Nonprofit lobbying organization Citizens for Responsibility and Ethics in Washington (CREW) sent a letter to the House and Senate Commerce Committees on Wednesday requesting they investigate the problem of large short sellers attempting to manipulate the federal government for personal profits. The letter singled out hedge fund titans Steve Eisman and Bill Ackman as potential violators.

Herbalife Bill Ackman speaking

Statement from CREW Executive Director

CREW Interim Executive Director Anne Weismann noted, “First it was Steve Eisman working over the Department of Education (Education) while he shorted the stocks of for-profit colleges and now it’s Bill Ackman ginning up a federal investigation into Herbalife to make good on a billion dollar bet against the company.”

Weismann went on to say: “While it appears DOJ and the SEC may be investigating Mr. Ackman’s conduct, Congress needs to look at this issue. Many Americans already believe Wall Street is a rigged game. Watching billionaire hedge fund managers get richer by instigating government action can only lead to further decreased confidence in the country’s financial markets and government leaders.”

Documents show Bill Ackman’s team regularly contacted FTC officials

As reported by the New York Times and other media sources, Bill Ackman and his hedge fund have made great efforts to urge federal regulatory action against Herbalife, a company in which Ackman held a large short position. Ackman even admitted he just needed to get any one of “the SEC, the FTC, the 50 attorney generals around the country, [or] the equivalent regulators in 87 countries,” to start an investigation in order to drive the price down.

The Department of Justice has reportedly initiated an investigation into Ackman’s activities as an attempt to manipulate Herbalife’s stock.

CREW claims that it received documents through a Freedom of Information Act request showing that Bill Ackman’s lawyer contacted Lois Greisman, the Associate Director of the Division of Marketing Practices at the FTC, on a regular basis with articles and blog posts critical of Herbalife, some of which were written or paid for by Ackman or his associates.

Pershing Square sent us the following statement:

Herbalife is an abusive pyramid scheme that preys on undocumented Latinos and others. We are proud of the work that we have done over the past two years exposing the pervasive victimization by Herbalife of millions of people. According to press reports and Herbalife’s own disclosure, the company is currently under investigation by the Department of Justice, FBI, SEC and FTC. We are confident that regulators will confirm our allegations.

An Herbalife spokeswoman declined to comment on the matter

See the full letter here – http://www.citizensforethics.org/page/-/PDFs/Legal/Letters/3-18-15_Commerce_Short_Seller_Letter.pdf?nocdn=1 and here http://www.citizensforethics.org/page/-/PDFs/Policy/3_18_15%20Herbalife%20Exhibits.pdf?nocdn=1