Ackman: HLF execs hiring own lawyers an ominous sign

Bill Ackman
Adam Jeffery | CNBC
Bill Ackman

Bill Ackman thinks shorting Herbalife is an even better short than it was when he first bet against the stock in 2012.

The most recent indicator is that senior executives at the nutritional supplement company are hiring or looking to hire their own criminal defense attorneys, the Pershing Square Capital Management founder said Monday evening at the 13D Monitor Active-Passive Investor Summit in New York.

"People are at risk of going to jail," Ackman said, noting the "very material" development.

He did not name specific "senior" executives or disclose how he knew the information, but Ackman said he was sure. The claim could not immediately be verified.

At Trian, we put our money where our mouth is: Garden
At Trian, we put our money where our mouth is: Garden   

A spokesman for Herbalife strongly denied the claim.

"This is just another stunt by Ackman and completely false. We are absolutely not pursuing any such counsel," the representative said via email.

Ackman said that a move to hire lawyers increased the chance that senior management or product distributors would turn on the company and help one of several government investigations.

"Everyone is going to be out for themselves," he said.

Ackman has famously called the company he is betting against a "pyramid scheme," a charge Herbalife strongly denies.

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Separately, protesters interrupted the conference earlier in the day in part to target Ackman.

Members of the group "Hedge Clippers" chanted for $15-an-hour wages for fast food workers, including at Burger King, previous a large holding of Pershing Square.

A spokesman for Ackman, who did not appear to be in the building at the time of the protest, did not respond to a request for comment.

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