William
Bill Ackman

Hedge fund billionaire Bill Ackman said he was “absolutely not worried” about being investigated for allegedly manipulating Herbalife stock as he denied fabricating claims that the nutritional products company is a pyramid scheme.

Federal prosecutors have issued subpoenas and the FBI has interviewed people tied to Mr Ackman, including some who work for the Global Strategy Group, a public affairs consulting firm hired by Mr Ackman for his Herbalife campaign, the hedge fund manager told CNBC in an interview Friday morning.

The probe focuses on whether these people made false statements about Herbalife to regulators in order to lower the company’s stock price. Mr Ackman said he was aware of the investigation but he has not been subpoenaed or interviewed in connection to the probe.

It is the latest twist in the long running Herbalife saga in which Mr Ackman’s Pershing Square has made a $1bn bet against the company’s stock. Other prominent investors such as Carl Icahn and Dan Loeb have taken the opposite view of Herbalife in their investments.

“I’m absolutely not worried,” Mr Ackman told CNBC about being personally dragged into the investigation. “People who are guilty of crimes don’t go on network television.”

But he said he could not guarantee that some representatives of Global Strategy Group or others did not make misleading statements to regulators, although he was not aware of any such instances.

A Global Strategy Group spokesman said GSG had “never made false statements about Herbalife, nor do we believe anyone else has either.”

“It is our clear understanding that we are not a target of any investigation, and we are confident that all our work surpasses the highest legal and ethical standards,” the spokesman added.

Mr Ackman hired the firm, in addition to legal counsel and private investigators, to make his case against Herbalife and said he has spent less than $50m on the campaign.

“We haven’t encouraged anyone to make false statements and we don’t need them to,” Mr Ackman told CNBC. “The facts speak for themselves. We’ve been very clear. Herbalife is a pyramid scheme. It’s a criminal enterprise.”

Mr Ackman added that he has held his position on Herbalife for some time and that he is not trying to make money on short term moves in the company’s stock.

The Federal Trade Commission and the Securities and Exchange Commission have been investigating Herbalife in connection to Mr Ackman’s allegations against the company.

He has said Herbalife preys on undocumented immigrants to make money in its multi-level marketing model. Herbalife has denied the accusations and accused Mr Ackman of falsifying information about the company.

Get alerts on Bill Ackman when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article