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ABC News Exposes Herbalife (HLF) Fraud - Pershing Square

April 24, 2014 1:31 PM EDT

Bill Ackman's Pershing Square Capital said last night's ABC News report on Herbalife Ltd (NYSE: HLF) exposed the company's fraud.

Using undercover footage of Herbalife-sponsored extravaganzas and hidden camera video of recruiting presentations at nutrition clubs, ABC's investigative report revealed examples of the pervasive and fraudulent wealth and health claims that drive Herbalife’s pyramid scheme.

Pershing Square Capital Management, L.P. encourages interested parties to watch the Herbalife Nightline segment available at http://abcnews.go.com/Nightline/video/herbalife-investigation-part-american-dream-sale-23449013

According to Pershing Square, "ABC's investigation proves that false and deceptive practices by Herbalife and its distributors are pervasive throughout its corrupt operation."

On Nightline, ABC identified one of a number of whistleblowers sourced by Pershing Square, Giovanni Bohorquez, a former Herbalife senior executive. As disclosed to ABC by Pershing Square, Pershing Square entered into an agreement with Mr. Bohorquez that provided for an indemnity for losses, including lost wages, in the event that he were to lose his employment in connection with his activities as an Herbalife whistleblower. The indemnity requires that Mr. Bohorquez must at all times testify truthfully about matters of which he is aware. In the event he loses his job, Mr. Bohorquez’s lost wages are only covered until such time as he finds alternative employment, which he must actively seek under the terms of the agreement.

The indemnity was negotiated by Mr. Bohorquez's legal counsel to protect his client in light of Herbalife's track record of attacking its critics through litigation and other forms of intimidation. Pershing Square disclosed the fact of the indemnification arrangement to ABC News and provided it with a copy of the agreement, which ABC published on the Internet prior to last night's broadcast.http://abcnews.go.com/images/Blotter/agreement_redacted2.pdf

"Giovanni is an honest and good man," stated William A. Ackman, CEO of Pershing Square. "I can attest to the strength and quality of his character. I would be delighted to serve as a reference for him as he seeks future employment."

With respect to indemnities provided by Pershing Square to other whistleblowers, including those cooperating with government agencies, these indemnities are limited to legal fees and damages incurred in the event that these individuals are sued by Herbalife, and do not provide for recoveries for lost wages.


ABC US News | ABC Business News


ABC US News | ABC Business News



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