Feds Seeking Information from Ackman Allies Regarding Herbalife

Mar 12 2015 | 7:54pm ET

Federal authorities are reportedly interviewing individuals associated with activist hedge fund manager Bill Ackman about his long-standing campaign against Herbalife. 

The FBI and prosecutors from the Manhattan U.S. Attorney’s office have conducted interviews and requested documents in recent months as part of the probe, according to media reports.

At issue is whether deliberately false statements about Herbalife’s business model were given to regulators as part of an effort to spur investigations into the company and thus lower it's stock price.

Neither Ackman or his fund, Pershing Square Capital Management, have been served with subpoenas or visited by the FBI in connection with the probe.

Ackman has been publicly talking Herbalife down for more than two years, alleging that the multi-level nutrition products firm is essentially a pyramid scheme and would collapse. Pershing Square holds a large short position in Herbalife stock.

In a statement, Pershing Square told The Wall Street Journal that it had been “completely transparent…and acted lawfully in every respect.”

For its part, Herbalife has responded to the news with a statement accusing Ackman of orchestrating a “false and fabricated attack” against the company.

Ongoing investigations into the Ackman-Herbalife saga are also underway by the SEC and FTC. 

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