ABC News Investigation Exposes Herbalife Fraud, Says Pershing Square

NEW YORK, April 24, 2014 /PRNewswire/ -- The following is a commentary from Pershing Square Capital Management, L.P. on the ABC News investigation on Herbalife:

 Last night on Nightline, ABC News revealed some of the results of its in-depth, six-month investigation of Herbalife Ltd.   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.

ABC's investigation proves that false and deceptive practices by Herbalife and its distributors are pervasive throughout its corrupt operation, which Pershing Square has extensively documented in a series of presentations, reports, videos, and dossiers that can be found at www.HerbalifePyramidScheme.com and www.FactsAboutHerbalife.com. 

As has been reported publicly, Herbalife is now under formal investigation by the Federal Trade Commission, the Securities and Exchange Commission, and the Canadian Competition Bureau, as well as a criminal investigation by the Department of Justice and Federal Bureau of Investigation.  The New York and Illinois Attorneys General have also recently disclosed investigations of the company.

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. 

About Pershing Square Capital Management, L.P.
Pershing Square Capital Management, L.P. ("Pershing Square"), based in New York City, is a SEC-registered investment advisor to private investment funds.  Pershing Square manages funds that are in the business of trading — buying and selling — securities and other financial instruments.  Funds managed by Pershing Square are short the stock of Herbalife Ltd.  Pershing Square may increase, decrease, dispose of, or change the form of its investment in Herbalife for any or no reason, at any time.  Pershing Square may change its views about or its investment positions in Herbalife at any time, for any reason or no reason.  Pershing Square may buy, sell, cover or otherwise change the form or substance of its Herbalife investment.  Pershing Square disclaims any obligation to notify the market of any such changes.  Please see the full Disclaimer appearing on website www.factsaboutherbalife.com. 

SOURCE Pershing Square Capital Management, L.P.

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