Betting on Zero Page #10

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And maybe

the right thing to do

is we cover the position,

And just decide that

we're somehow interfering.

Because

the government is afraid to

Step into a situation

with a short seller.

We actually had a discussion.

In the middle of

that discussion,

I got a call from our trader.

Our head trader, ramy, said,

"bill, herbalife stock's

been halted."

And I said,

"perhaps there is a god."

Less than 90 minutes ago,

we learned

The controversial maker

Of health shakes

and supplements

Has been served with notice

By the federal

trade commission

That it will be investigated.

Male reporter:

The investigation could last

six months to a year.

The stock has

just taken a pounding

And is actually giving ackman

Back to somewhat

near breakeven.

Female reporter:
Herbalife

says it welcomes the inquiry,

And is "confident that

herbalife is in compliance

"with all applicable

laws and regulations."

This is the one thing

That herbalife

wanted to avoid,

I can tell you that,

from day one.

Icahn:

Now with the ftc in there,

I'm just hoping that

we get a clean bill of health,

'cause I really do

think that this company...

Yeah, yeah,

did some marketing stuff.

Was that wrong?

Look, do they make promises?

Possibly,

But there was

also a lot of people

earning a lot of money.

And ackman has this mantle,

"I'm saving the hispanics."

Why doesn't he

go save himself?

Female anchor:
We wanna

bring you an update

on this breaking news story

On herbalife.

Herbalife is now

being investigated

By the fbi,

by federal authorities,

And this looks

like an escalation

Of the probe,

but the company themselves,

Saying they have

no knowledge of it whatsoever.

Ackman:
You've got multiple

government regulators,

agencies

Looking at the company

from civil

And criminal point of view.

And I think

that's where the rubber

Ultimately meets the road,

In terms of

whether or not herbalife

Gets found to be

a pyramid scheme.

-Man:
A quick question...

-Wait. I'm gonna go...

My father is

asking a question.

It is always risky to

call on your father.

The definition of

a pyramid scheme

is what, bill?

And how close are you

getting to be able to prove

That it is a pyramid scheme?

- Dad, if you don't

know it by now...

Brooks:

I've always hated bullies.

People that use their

force of personality

To push other people around.

-Good morning, mr. Brooks.

-Good morning.

When I look at

the victims of these things,

I hope I can do something

to fight back

Against the bullies.

We're ready.

So am I.

And we're gonna put these away

when we get to the courthouse.

We object to the settlement!

Herbalife!

Herbalife!

Brooks:
Today's hearing is

a final approval hearing.

I filed a fairly lengthy

objection to the settlement.

For herbalife to get a release

from 1.5 million class members

In exchange for $15 million,

Is getting off very cheap.

We're gonna

follow you in, okay?

Okay, yes.

Brooks:
I hope that

the judge comes out and says,

"I'm really troubled

by this settlement.

"I think mr. Brooks

and his objectors

"have raised some concerns,

"and I'm not gonna

approve this deal."

I mean, that's my...

That's my dream.

Well, every once in a while

you get kicked in the head,

And I just got

kicked in the head.

Oh, yeah.

I think there's

very little doubt

That she is going to

approve this settlement.

She rejected every

argument that I made.

I didn't score a single point.

Nothing... Nothing moved her.

Not the slightest.

Contreras:

Whatever decision she makes,

We won today,

Because you

brought our message.

And for her to say

it didn't matter,

They do matter.

And we're not

gonna stop this fight.

We thank you. I thank you.

-Yeah. Thank you.

-Thank you.

Thank you.

Thank you for helping us.

I'm very afraid that herbalife

are going to say to the ftc,

"look,

a federal district judge

"has approved a settlement.

"we've got a release

from 1.5 million

class members,

"we paid a bunch of money..."

And there's gonna be at least

a faction

Within the ftc that will say,

"well, why shouldn't we

just sort of go onboard?

"maybe we'll make

them pay a fine.

"but basically we're not

going to go to the heart

"of why this industry is gonna

continue to burn people."

Ackman:
So how could they have

gotten away with this?

What pyramid scheme

has five billion in revenues,

Is listed on the new

york stock exchange,

Is audited by pricewaterhouse?

Now big lies are used

by totalitarian regimes,

And by the nazis,

and by lots of people.

And people

generally believe big lies

Because they are so bold,

That how can it

possibly be false?

Madoff was

managing $50 billion.

The notion that

a $50 billion money manager

was running a pyramid scheme,

Well, that's why people

kept putting money into it,

'cause it was

the biggest lie of all time.

Small lies people

don't get away with.

Big lies people get away with.

Kirby:

You open your nutrition club,

You realize you've

gotta recruit people,

And start making a commission

from your downlines.

But I couldn't lie to people

And tell them,

"you're gonna make

really good money,"

When I knew I had

five nutrition clubs

That had been

operating for six months,

And we had yet

to turn a profit.

So, uh, we try to make

their business model work,

And stay away

from the recruiting

And trying to sell the dream,

We tried to just

sell the products.

It didn't work.

The products

are too expensive.

And you're

trying to get people

To drink a liquid shake

over eating a meal.

You're going

against human nature here.

For the most part,

we would eat half of it,

And try to sell

the other half.

Interviewer:

What happened to the rest?

You throw it in the dumpster.

We kept it going

for a year and a half.

For a lot of

people in herbalife,

They would just

go look for a job

And feel like a failure

and be embarrassed,

Because they'd brought

all their friends and family

Into this scam.

Let's see if I can handle this

without choking myself.

But I was one of

the fortunate ones that

Luckily found

a new and emerging

industry to get into,

That went right along

with the storefronts

That I'd already built out.

We just made a quick switch

and turned it

into a vapor lounge.

We were helping

people to lose weight,

Now we help people

to stop smoking.

So it all worked out,

but not as a nutrition club.

Luckily I didn't lose

my collateral with the bank.

I still have the car.

Mark hughes:
Trust me.

I can tell you with

absolute sincerity,

The wildest dreams

you've ever thought of

can come true in herbalife.

I came home today and

this was on my door.

It's addressed to me.

It says, "dear ms. Contreras.

"on July 15, 2014,

"univision chicago

aired a piece

"in which it published

the following statement.

"according to

lulac's julie contreras,

"there is fear

in the community

"that herbalife is

spreading the rumor

"that those who make

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