Published On: Mon, Mar 16th, 2015

Ackman: Feds Subpoenaed My PR Firm, But Not Me

The PR firm GSG released a statement saying that it is their "clear understanding" that they are not firm is not the target of the FBI probe.

BILL ACKMAN screen shot

Hedge fund manager Bill Ackman, whose 2-year effort to bring down nutritional supplement provider Herbalife coincided with his shorting their shares through his Pershing Square Management, is complaining that federal investigators have been questioning his PR firm, Global Strategy Group, O’Dwyer’s reported.

Following a story in the Wall Street Journal last week, that the FBI is investigating alleged manipulation of Herbalife shares and interviewing Ackman’s associates, Ackman told CNBC’s “Squawk Box” (he called in) that he had not been questioned, but GSG employees have been.

“We’ve hired a political consultant, a firm called Global Strategy Group, ” he said. “They in turn hire subcontractors around the country and they assisted us with kind of government relations and lobbying and kind of advocating on behalf of my very firmly held view that Herbalife is a pyramid scheme. And my understanding is some of there, I think a handful of people that they’ve hired or that work for them have been interviewed by the FBI.”

GSG released a statement saying that it is their “clear understanding” that they are not firm is not the target of the FBI probe.

“We are confident that all our work surpasses the highest legal and ethical standards, ” the statement said, noting that the firm “has never made false statements about Herbalife, nor do we believe anyone else has either.”

The WSJ reported that the FBI and Manhattan US attorney’s office is looking into the possibility that “somebody” made false statements about Herbalife’s business model—that it constituted, for instance, a pyramid scheme—in order lower its stock price.

Herbalife has been saying that Ackman has a $1 billion bet against them.

“For more than two years, he has spent over $75 million orchestrating a false and fabricated attack against Herbalife, all in an effort to enrich himself, ” the company said in a statement. “We are confident in the strong fundamentals of our business model and have remained committed to helping people and communities improve their nutrition, while knowing that one day his tactics would be exposed.”

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