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 [2]), 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 [3]:
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.
[4]