Carl Icahn breaks 'Herbalife's (HLF's)' dodgy deal with the FTC

          July 15th 2016

                                         PROHIBITED MISREPRESENTATIONS

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and

employees, and all other persons in active concert or participation with any of them, who

receive actual notice of this Order, whether acting directly or indirectly, in connection with

the advertising, marketing, promoting, or offering of any Business Venture, are

permanently restrained and enjoined from misrepresenting or assisting others in

misrepresenting, including by providing others with the means and instrumentalities with

which to misrepresent, expressly or by implication:

A.

That participants will or are likely to earn substantial income;

B.

The amount of revenue, income, or profit a participant actually earned or can likely

earn;

C.

The reasons participants do not earn significant income, including but not limited to

representations that participants fail to devote substantial or sufficient effort

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The above extract clearly demonstrates that Carl Icahn's absurd statement posted below (in which he implies that anyone who has failed to make money out of 'Herbalife' and who filed a complaint against the company, only had him/herself to blame), immediately breaks 'Herbalife's' dodgy deal with the FTC. Furthermore, contrary to what the inflexible Mr. Icahn pretends, the FTC has not stated that it did not find 'Herbalife' to be operating a pyramid scheme.

Whilst reading Mr. Icahn's reality-inverting statement, bear in mind that the actual overall hidden loss/churn rate for participation in the so-called 'Herbalife MLM income/business opportunity' has always been effectively 100%. To date, tens of millions of individuals around the globe have been churned through the 'Herbalife' racket leaving their cash behind them.

More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).

David Brear (copyright 2016)

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Former Fuller Brush Salesman : turned Billionaire tycoon, Carl Icahn.

July 15, 2016

I have always believed in Herbalife’s strong fundamentals and am pleased the Board has decided to increase my ownership limit from 25% to 34.99% of the Company’s outstanding shares.  A significant part of my investment success is directly tied to our in-depth investment research and understanding of often complex and unique issues facing companies.  One can be sure that this was the case with Herbalife where we spent considerable time and resources studying the false pyramid scheme accusations made against the Company.  Unlike many of those that “shorted” Herbalife, we did not rely on one or two research papers prepared by non-experts.  As a result of our research, over three years ago we concluded that Herbalife was not a pyramid scheme.  The FTC settlement announced today, coming after a two-year investigation also concluded that Herbalife is not a pyramid scheme – a conclusion that obviously vindicates our research and conviction.  While Bill Ackman and I are on friendly terms, we have agreed to disagree (vehemently) on this subject.  Simply stated the shorts have been completely wrong on Herbalife.  Now that the Company has reached a settlement with the FTC, it is time to consider a range of strategic opportunities, including potential roll-ups involving competitors, as well as other strategic transactions.

I have the greatest confidence in Herbalife’s CEO, Michael Johnson, and the entire management team, who have skillfully led the Company through adversity, including holding firm against a high-profile PR campaign against the Company by Bill Ackman where it was alleged more than once that the Company would be shut down. Obviously, we are still here.  I genuinely commend management’s steadfastness in the face of short sellers desperate to rally a bear raid based on false accusations. The short-sellers should also note that since joining the Board three years ago, we have paid attention to their accusations and while the vast majority have been baseless, a handful of their points were valid and the Company has made appropriate changes.  Interestingly, ending and modifying certain practices has not hurt earnings one iota.

Herbalife produces some of the finest nutrition products in the world and its direct sales model gives people an opportunity, either full- or part-time, to start their own business.   Without the Herbalife sales opportunity many of these people would be unemployed or otherwise have a difficult time finding work. In my teens I spent several summers working as a Fuller Brush man going door to door often working 12 hours per day.  I ended up earning more during the summer than my father.  Many of my friends who also started with me but were not willing to work as hard failed as salesmen.  But no one would believe their failure made Fuller Brush a “bad” company.  Fuller Brush, much like Herbalife, provided many people with potential income opportunities where such opportunities may not have otherwise existed.  Just because not everyone can be successful selling Herbalife products does not mean Herbalife is a “bad” company.”  I believe that now the cloud over Herbalife is gone, the Company will continue to grow and continue to provide much needed employment for many more hard-working people.”

Carl Icahn

http://www.bloomberg.com/news/articles/2012-02-22/fuller-brush-files-for-bankruptcy-court-protection-owing-up-to-50-million

https://en.wikipedia.org/wiki/Fuller_Brush_Company

Ironically, the Fuller Brush Company (a lawful direct selling company, founded in 1906) recently filed for bankruptcy with debts of $50 millions.