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Ackman Reprieve: Herbalife Halt Likely Due To Resignation Of Auditor KPMG

Tyler Durden's picture




 

Moments before the open, HLF stock, of the infamous Ackman-Icahn spat, was halted for trading with news pending. Rumors quickly spread that this was due to Icahn pushing to add insult to injury and either tendering for the company, or LBOing it outright. Then moments ago, NYT's DealBook reported that this is due to a KPMG resignation over an investigation, which immediately was assumed by the other camp to imply a fault with HLF's books. Yet, as we reported in the frontrunning post (and tweeted subsequently), the resignation may have nothing to do at all with Herbalife and everything to do with a KPMG partner leaking inside info, and totally unrelated to any improprieties at HLF.

From NYT:

Herbalife is poised to disclose on Tuesday that KPMG will have to resign as the company’s auditor, following the accounting firm’s firing of a senior paetner, according to a person briefed on the matter.

 

Herbalife shares were halted for trading because of news pending on Tuesday morning.

 

KPMG disclosed late Monday that it had fired the partner, who was based in Los Angeles, for providing inside information to an unnamed individual who then traded in shares of several West Coast companies. The firm did not name the fired partner, but described the individual as having led accounts for some clients in the region.The accountancy did not name the companies whose
confidential information was disclosed as part of the scheme.

 

A call to a spokesman for Herbalife was not immediately returned.

For now, mostly confusion and chaos, and it is best to wait for the official HLF release which should clarify what the full story is.

Of course, it would be poetic if somehow Icahn discovered a weak leaked link that had been linked, pardon the pun, to someone in the Ackman entourage, and then used it as ammo to bring securities charges.

Because remember:

That Icahn is out there. He can't be bargained with. He can't be reasoned with. He doesn't feel pity, or remorse, or fear. And he absolutely will not stop, ever, until Ackman is destroyed.

 

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Tue, 04/09/2013 - 10:10 | 3426207 Dangertime
Dangertime's picture

Aaaaaand it's gone!

Tue, 04/09/2013 - 10:15 | 3426241 greyghost
greyghost's picture

woody alert: silver

Tue, 04/09/2013 - 10:20 | 3426263 cifo
cifo's picture

It can happen to Icahn too.....

Tue, 04/09/2013 - 10:48 | 3426409 fuu
fuu's picture

Why hello there Nessie.

Tue, 04/09/2013 - 10:19 | 3426254 GetZeeGold
GetZeeGold's picture

 Oh hell.....who needs GAAP?

Tue, 04/09/2013 - 12:16 | 3426858 Carl Spackler
Carl Spackler's picture

Game to Mr. Ackman.

Mr. Icahn to serve.  He leads, one set to zero.

Tue, 04/09/2013 - 10:19 | 3426270 Handful of Dust
Handful of Dust's picture

Who's crazy to inves tin this stuff. I have all mine safely invested in MFG and Cyprus bonds.

Tue, 04/09/2013 - 10:53 | 3426430 slaughterer
slaughterer's picture

Put me in a room with the two, and i would prefer to spend time with Bill than with Carl.  That said, JCP going to sub-$14 and HLF blasting off to $50 means Ackman is toast.  

Tue, 04/09/2013 - 10:11 | 3426212 slyhill
slyhill's picture

Maybe JCP should sell HLF for BTC.

Tue, 04/09/2013 - 10:30 | 3426329 tarsubil
tarsubil's picture

I hear that JCP has a position available. You seem to have the outside the box thinking they need.

Tue, 04/09/2013 - 10:49 | 3426411 slyhill
slyhill's picture

I would introduce a new line of SKX that would kick the can the furthest.

Tue, 04/09/2013 - 10:09 | 3426214 NoDebt
NoDebt's picture

And WHY would a partner of KPMG leak inside info (and to whom)?  I smell "expert network" here.  Like from that partner directly to Ackman or Icahn.

 

Tue, 04/09/2013 - 10:18 | 3426238 Sudden Debt
Sudden Debt's picture

KPMG or even ERNST AND YOUNG....

FUCK THAT!!!

YOU PAY A SHITLOAD OF MONEY....

FOR "THOSE PROFESSIONALS" TO CHECK YOUR BOOKS....

AND THAN 8 KIDS SHOW UP!!!

8 KIDS!! NO MORE THAN 20 OR 22 YEARS OLD!!!!

AND THOSE KIDS!!.... will check....

WHAT A ARMY OF ACCOUNTANTS THAT LOOK AND ACT LIKE NAZIS HID FOR THEM???!!

AND THOSE KIDS HAVE TO FIND IT IN.... 3 DAYS????....

WHOEHAHAAHHAHAAHAHAHAHA!!!

AND THAN "INVESTORS" BASE THEIR INVESTMENTSTRATEGIES ON THEIR WORK!!

WHOEHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!

WE ALWAYS PUT THEM IN THE COLDEST, DARKEST AND FURTHEST WAY FROM THE COFFEE MACHINE AND THE TOILETS!!

OH YEAH!!!

AND THAT PHONE???!!!

IT DOESN'T WORK!!!

SO IF YOU HAVE ANY QUESTIONS, I'M IN THAT OFFICE 500 METERS FROM HERE!! Sometimes....

Tue, 04/09/2013 - 10:22 | 3426274 GetZeeGold
GetZeeGold's picture

 

 

Looks like you picked the wrong day to stop sniffin glue.

http://www.youtube.com/watch?v=7WAwuSK36Gw

Tue, 04/09/2013 - 10:24 | 3426293 Sudden Debt
Sudden Debt's picture

who told ya I stopped?

Tue, 04/09/2013 - 10:30 | 3426316 GetZeeGold
GetZeeGold's picture

 

 

Mayor Bloomberg....oh wait....that was soda.

 

Glue's still OK.

Tue, 04/09/2013 - 10:37 | 3426362 Sudden Debt
Sudden Debt's picture

actually I SNIFF STICKY NOTES!!!

WHOEYAAAAaaaaaa!!!

Tue, 04/09/2013 - 10:41 | 3426386 GetZeeGold
GetZeeGold's picture

 

 

Ain't no law against it....yet - Cindy Lauper

Tue, 04/09/2013 - 10:24 | 3426289 NoDebt
NoDebt's picture

I was reading and thinking.... uh huh, uh huh.  Then I got to this little gem:

"WE ALWAYS PUT THEM IN THE COLDEST, DARKEST AND FURTHEST WAY FROM THE COFFEE MACHINE AND THE TOILETS!!"

Now I know you've been through the war for real!  Same here.  Either very cold or very hot but definitely very far from help.

Tue, 04/09/2013 - 10:11 | 3426215 Manipulism
Manipulism's picture

What are they selling?

Herpes?

Tue, 04/09/2013 - 11:01 | 3426466 Kreditanstalt
Kreditanstalt's picture

I have no idea what it "sells"... it doesn't seem to PRODUCE anything.  An outfit that buys raw materials, repackages and "markets" them under new labels, sets up a pyramid-scheme operation to flog them, and supposedly finds millions of willing suckers/customers?

Only in America. 

Tue, 04/09/2013 - 10:11 | 3426220 astoriajoe
astoriajoe's picture

"which should clarify what the full story is."

is obfuscate another word for clarify?

Tue, 04/09/2013 - 10:14 | 3426229 Dr. Engali
Dr. Engali's picture

I hear Corzine is looking for a new position.

Tue, 04/09/2013 - 10:26 | 3426297 cifo
cifo's picture

missionary position....

Tue, 04/09/2013 - 10:13 | 3426231 HD
HD's picture

I'd have more respect for these two if they just took it outside and beat the shit out of each other. A couple of beers together after an ass kickin' and they might end up fast friends.

 

 

Tue, 04/09/2013 - 10:27 | 3426305 NoDebt
NoDebt's picture

Unlikely.  The beating the crap out of eachother, sure.  Ending up fast friends.... no.  The only way they would EVER claim friendship is posthumously and just for sake of appearance.

Tue, 04/09/2013 - 10:16 | 3426244 Richard Head
Richard Head's picture

I'm sure there's only one cockroach in/around Herbalife.  Cramer says to buy, buy, buy!

Tue, 04/09/2013 - 10:20 | 3426271 Bearwagon
Bearwagon's picture

Wasn't MDB heavily invested in HBL? If so -- who could have known ....   ;)

Tue, 04/09/2013 - 10:28 | 3426318 NoDebt
NoDebt's picture

The Hartford Balanced Income series of funds?  Dunno.  Maybe he is.

Tue, 04/09/2013 - 10:45 | 3426395 Bearwagon
Bearwagon's picture

I stand corrected. It should read HLF, I see. But, man, I'm into completely other herbs ... so be a bit patient with me on this one

Tue, 04/09/2013 - 10:24 | 3426286 Inthemix96
Inthemix96's picture

I was well pissed yesterday afternoon, and guess what?

Do any of you good lot want to buy a bridge?  I seem to have aquired one while inebriated, and I dont know what to do??

Tue, 04/09/2013 - 10:25 | 3426294 Bearwagon
Bearwagon's picture

Place it as colleteral at the ECB. Should be good for a few billions ...

Tue, 04/09/2013 - 10:30 | 3426324 mdtrader
mdtrader's picture

47.8 million on food stamps + 101 million without a job = buy consumer staples on 20 times earnngs. Because the 3% dividend will stand you in good stead when the stocks lose 25-30% or more of their value!

Tue, 04/09/2013 - 10:44 | 3426393 Terminus C
Terminus C's picture

This Ich vs Ack charade is just soap opera for the "sophisticated" masses (aka financial nerds like us).  It is still a pointless distraction and falls under the tabloid news along with Lindsey Lohan and celebrity baby bumps.

Tue, 04/09/2013 - 10:47 | 3426406 fuu
fuu's picture

The girl fight continues.

Tue, 04/09/2013 - 11:06 | 3426496 Catullus
Catullus's picture

And this is why insider trading should NOT be illegal. You have an auditor who looks at the books of a company and concludes the thing is dogshit. The insider trading laws only prevent him from telling other people how much dogshit the company is. It doesn't change whether the company is in fact dogshit or not. But did KPMG corporate let anyone on that it is dogshit? Maybe or maybe not. But for an auditor to be truly independent, they need to be able to tell not only company management that they're a mess, but also investors.

What's more is the insider trading laws only encourage an auditor to pass the information along to people. Without insider trading laws, auditors would be hired by investors, not executive management.

Instead, we get pissing matches between billionaires on cable television about whether the thing is piece of dogshit or not. And of course the volatility that the prop traders love so much. This is the world of "investing" when you're not allowed to trade on facts.

Tue, 04/09/2013 - 14:31 | 3427610 Pairadimes
Pairadimes's picture

One way to make a small fortune these days is to have given Ackman responsibility for a larger one.

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