Short Seller Sues Banks, Icahn Over Support of Herbalife (HLF) (BAC) (JPM)
According to Reuters on Wednesday, Daniel Ravicher, a New York lawyer and short seller of the stock, has taken up a lawsuit again three large banks as well as activist investor Carl Icahn. Ravicher is filing against Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and JPMorgan (NYSE: JPM) to pull back on $1.2 billion in financing for Herbalife.
Ravicher is also suing Icahn in a separate suit shortly after Icahn disclosed a 16 percent stock in Herbalife. Ravicher alleges that Icahn's move was based on revenge versus hedge fund manager Bill Ackman and not based on a sound investment decision.
On the banks, Ravicher alleges that they breached fiduciary duties to him as a shareholder by failing to withdrawal financing. He named 50 defendants in the suit, including CEOs of the three major banks.
Ravicher said he has lost about $75,000 on his short position, which was entered at about the same time Ackman announced his position last December.
Shares of Herbalife are down 2.5 percent Wednesday.