Herbalife: Media Materially Misstates FTC Outcome, Icahn Files Potentially Questionable Statement with SEC
By Tyler Durden
Submitted by @QTRResearch
Herbalife: Media Materially Misstates FTC Outcome, Icahn Files Potentially Questionable Statement with SEC
- FTC Commissioner Ramirez stated during Friday’s 10AM press conference that press reports claiming the “FTC confirmed Herbalife to not be a pyramid scheme” were inaccurate
- The misleading statement that “the FTC concluded Herbalife was not a pyramid scheme” was in an early morning Carl Icahn press release, subsequently filed with the SEC in a 13D/A
- MLM attorney and advocate for the industry Kevin Thompson stated that this settlement “does not represent the end of the FTC process with Herbalife”
- Adamant Herbalife long John Hempton noted on his blog and on Twitter that “If Herbalife is a pyramid scheme, the conditions imposed will cause it to collapse”
- Substantive risk remains as FTC and Pershing Square engage international jurisdictions with the agency’s findings and the SEC concludes its investigation into the company
Matt Goldstein, New York Times: “Did you review the language in that press release that sort of affirmatively said that they were not declared to be a pyramid scheme? Because they’re sort of touting that as an outright victory.”
FTC Chairwoman Edith Ramirez: “I do not agree with that statement. The word ‘pyramid’ does not appear in our complaint, that is true. But, again – the core facts that we’ve alleged, that we consider to be problematic with their compensation structure are set forth in detail in our complaint and again I will leave to readers to draw their own conclusions – but they were not determined not to have been a pyramid. That would be inaccurate.”
Matt Goldstein, New York Times: “OK, so you don’t endorse their statement in the press”
FTC Chairwoman Edith Ramirez: “I do not endorse that statement.”
The Biggest PR Con Job Ever Seen
On the morning of Friday, July 15, at around 7:43AM EST, headlines that were later in the day proven to be misleading crossed the newswire courtesy of Dow Jones. When the initial headline broke, despite being retracted later in the morning, it was too late: the message had spread like wildfire – and it was downright “inaccurate” to use FTC Chairwoman Edith Ramirez’s terms.
Dow Jones headlines claimed that the FTC had determined “Herbalife is not a pyramid scheme”. The headlines were then picked up by every news outlet in the world, and were disseminated similar to the way Benzinga and others pushed them onto their millions of Twitter followers and website visitors.
Here’s an example of what the narrative was at 7:43AM Friday morning:
Imagine the public’s surprise when FTC commissioner Edith Ramirez got in front of a room at a press conference at 10AM EST and, when confronted that the FTC complaint essentially defines a pyramid scheme, said that “they were not determined not to have been a pyramid. That would be inaccurate.”
Also imagine the surprise of those like myself, who actually read the lawsuit that was to be filed against Herbalife. While the lawsuit does not contain the words “pyramid scheme”, point 148 states:
Let's contrast that …read more
