Betting on Zero Page #9

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was already over.

The class is approximately

1.5 million herbalife

distributors.

Herbalife is paying

a settlement

fund of $15 million,

Which works out to

about $10 a person.

- Tomorrow in court...

I'm saying to

the judge that at least

280,000 people

reached supervisor level

And the average losses

are around 8,000

or maybe even more.

I think that the aggregate

damages for the class

Are between $700 million

and $1.1 billion.

I want the judge to see

that there are real people

Who have been really damaged

by this company.

The rules are that the judge

has to find that

the settlement is

Fair, reasonable and adequate.

I had each of these people

sign a declaration

About their experiences

and their objection

to the settlement.

They understood that

this is a long shot.

if you wanna

come here in the circle.

Father god, I ask you today

to call upon our ancestors,

And I call upon you,

mother earth,

To come into

the life of douglas brooks.

Brooks:
Thirty-three years

of practicing law,

I've never had clients put me

in the middle of

a prayer circle.

Contreras:
I ask you to hold

each one of our victims

And douglas brooks

by their hand,

And that inside of douglas

is the energy of

the holy spirit, father god.

Amen.

Amen.

It brought home to me

That this is not just

an abstract legal issue.

This is something

that affects people's lives.

If I can do

something to help them,

That will make me feel like

I'm doing

something meaningful.

Questions?

Yes, sir.

I don't understand something.

You got this nice presentation

which you spent

a lot of money on.

Everybody is

clueless except for you.

I don't understand.

Tell me why is carl icahn

making a mistake?

Show me exactly the illegality

that herbalife is doing

To get this company shut down.

I don't see it.

And why is everybody else

on the other side?

Okay, well,

sounds like you're bull.

No, no.

I'm not a bull, or a bear.

By the way,

it's a great question.

Okay, it's a great question.

Let me answer it.

Give me a great answer.

We've had an army

working on this project.

Hundreds of people,

investigators, lawyers.

Carl icahn didn't do

the kind of due

diligence we did.

Look, the nutrition club thing

is designed to be secretive.

This is an ingenious fraud.

You go after people who are

the lowest income,

most unsophisticated,

Many of them are undocumented.

You don't complain when you're

an undocumented immigrant

Because you might

get thrown out of the country.

Are all of these

latino distributors

Documented here in the us?

So, every

distributor that signs up,

First they provide us

with a taxpayer id number.

That is our obligation

to ensure

That us taxes are being

paid by all our distributors.

Well, then, what is

a "no-fly distributor"?

Because that doesn't

seem to make sense to me.

When you look

at the rewards,

Points that you

get within herbalife,

You have those eligible

to go on

Cruises and airplanes,

But then a separate group

that are no-fly.

What does that mean?

So, that's not part

of our terminology.

Our focus is on supporting

all the distributors.

Woman:
They don't know what

a "no-fly distributor" is?

It's not something

that's in our terminology.

Narrator:
Late in 2013,

Herbalife stock soared

towards an all-time high

As a series of developments

Undercut ackman's

short position.

He went after belgium,

When belgium looked like

it was going in his favor.

And when belgium

came out in our favor,

Actually discrediting

ackman's thesis,

It was no longer important.

Bill ackman at

one point had said,

He didn't believe the audit

would come back clean.

It did.

That stock right now is up 7%.

This is viewed as

a very positive move.

What does this news

mean to you, carl?

Icahn:
You know

sometimes investment

is just sort of a no-brainer.

I think this one,

when I bought it,

Obviously it was.

You've laid out

an argument today

That seems, frankly,

largely circumstantial.

And so...

Maybe you could

connect the dots.

There's nothing

circumstantial about it.

We have facts.

It seems like all of

wall street is against you.

Analysts,

investment bankers...

Ackman:
People on wall street,

it seems,

Don't really

care whether or not

The company is

a pyramid scheme.

All they really care about

Is the stock price

in the short term.

Since you haven't looked

at the stock price,

I'll tell you,

It's up about 13%

bouncing around.

Herbalife is

gonna use the fact

That the stock price

is up today

To say that

everyone is ignoring

what we have to say.

My advice is

you probably

shouldn't ignore it.

Next?

It's not a good idea to take

moral issues to wall street

And have them be the judge.

But at heart,

it is a moral issue.

Ackman:
I think a good model

in terms of how to behave,

Is to think about

how your actions

would be perceived

If they were written about

on the front page

Of the new york

times tomorrow,

And your friends

and your family

Open up the paper

and they read it,

It accurately

describes your behavior.

And is that a story

you'd like them to read?

To learn more

about the wonderful

things you're doing,

Or is it a story that would

cause them to

think ill of you?

If your actions would cause

your friends to be concerned,

If they understood the facts

On the front page of

the new york times,

Then you shouldn't do it.

Narrator:
Fifteen months

after his opening salvo

Against herbalife,

Ackman did find himself

on the front page

Of the new york times,

But in a way he neither

anticipated nor welcomed.

Michael schmidt:

This is a guy who made a bet

against a company,

Who's now trying

to get regulators

To bring down that company.

He needs to have victims.

These people that have been

harmed by this company,

Able to connect

with the regulators,

And show the regulators

how they'd been hurt by this.

He's been paying non-profit

hispanic groups

For their help in this.

Richard:
Undocumented

former distributors

Are not going to

go to the government

And give them their name

and their information.

Which people tend not to do

When they've been victims of

pyramid schemes anyway.

They feel ashamed.

They feel embarrassed.

They feel they've been

part of perpetuating

the crime.

Ackman:
So we reached out

to latino grassroots

organizations

For a national victim

recruiting campaign.

I think we

committed as much as

$130,000 to that effort.

Mr. Ackman has made

a lot of donations

To these non-profit

organizations,

stuff like that,

That we simply

don't know about.

We only know a sliver of that.

So people question,

Is he simply bringing

the information to regulators,

Or is he doing things that

maybe he shouldn't be doing?

Ackman:
The day after

this fairly horrible

New york times article,

I was having

an advisory board meeting.

I said,

"look, what do we have to do?

"I can't believe

the government hasn't acted."

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