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Herbalife Ltd. Message Board

  • sebast_texas sebast_texas Dec 23, 2012 6:54 PM Flag

    Can HLF sued Ackman and his Fund if FTC and SEC clears them out of a pyramid scheme?

    What could be an scenario with that outcome guys?.
    I think they could but the outcome will never be known because usually lawsuits that big get settle. I think more pressure is on the FTC and the SEC the following days. I want to see if the SEC decides to investigate HLF or Ackman. Both of them accused each other. (pyramid scheme or manipulation)

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    • If the SEC investigates HLF, that'll be another immediate 15% drop (look what happened with MCP).

    • They can always sue, but HLF likely does not have a case.

      The only plausible claim HLF might have against Ackman would be for defamation, but HLF would need to establish that Ackman's presentation was materially false (ie. its not enough if a couple of details were incorrect, as long as the general gist of Ackman's presentation was correct). Truth is an absolute defense against defamation.

      Ackman seems supremely confident that he's correct, betting over a billion dollars on his short position, and as Ackman said if HLF sues him and/or Pershing Square, they get access to HLF's books and records which may well provide even better evidence of the pyramid scheme.

      Sentiment: Strong Sell

    • No chance, nothing illegal about shorting, and actually most HFs do not disclose their positions... its equivalent to showing your cards playing poker and IMO, he was a fool to do so, but suing... no-way!

 
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