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Is Herbalife Ltd. (HLF) Suing Bill Ackman Over Stock Manipulation Allegations?

Herbalife Ltd. (NYSE:HLF) is believed to be preparing to pursue legal proceedings against activist investor, Bill Ackman, over tirade comments made earlier last week. The comments made by the investor have only gone to harm the stock, which has been plummeting in the market. Fox Business, Charlie Gasparino, reports that Herbalife is in the process of filling stock manipulation charges against the billionaire investor.

Bill Ackman in crowd

Ackman has publicly been criticizing Herbalife Ltd. (NYSE:HLF) ever since he took out $1 billion bet against it, maintaining it was a pyramid scheme. Herbalife has already been forced to slow its growth as attention shifts to adjusting the business a move that has considerably affected the stock price

“I do know they are prodding regulators, SEC, I would even think the justice department to go after him. To say that this guy is doing stuff, leaking stuff, going after the company saying stuff to move the stock and to profit off that,” said Mr. Gasparino.

Herbalife Ltd. (NYSE:HLF) had in the past indicated that it was planning to pursue civil proceedings against Ackman but seems to have changed sentiments to stock manipulation charges. Herbalife is also believed to have been angered by Ackman decision to postpone a preplanned meeting on the last minute, a forum that could have been used to settle out some scores.

Gasparino maintains it might be a dead end for Herbalife Ltd. (NYSE:HLF) on its pursuit of Ackman considering there has not been any company that has been successful on this front. The analyst also notes that regulators perceive short selling as an important aspect of trading as it always goes a long way in keeping the market safe.

“People for years said Steve Cohen is guilty of stock manipulation and things of that nature, they never got him; these cases are difficult to make and regulators like shorts. They think it is a sort of a hedge on the market against all the promotions, the sleazy penny stock promotion that goes on,” said Mr. Gasparino.


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