Wall Street Financing Whistleblower

A Wall Street Hedge Fund Manager agreed to pay a former Herbalife executive turned whistleblower $3.6 million if the executive lost his job after whistleblowing. The agreement between the Hedge Fund Manager and the Herbalife whistleblower states that the whistleblower will be reimbursed for lost wages and benefits. According to ABC News, the Hedge Fund Manger, known for his “short” positions, stands to make $1 billion if the price of Herbalife’s stock collapses. For those who are not aware of a short position, an investor will make more money if the stock price falls. Heralife (HLF) stock currently sits at $58 and has 25 million shares shorted or 35% of Heralife’s shares. The Head Fund Manager, Bill Ackman, claims that the company is operating in violation of Chinese Law and operates much like a pyramid scheme. In December 2012, Acman took a $1 billion short against Heralife.

Hedge Fund Managers paying whistleblowers to disclose fraud should put Fortune 500 companies on notice that reporting fraud is the new Golden Nugget for Wall Street. I’ll sure this is not the last time we see Wall Street paying whistleblowers to rat on their companies.

Related Links: http://abcnews.go.com/Blotter/bill-ackmans-secret-deal-herbalife-whistleblower/story?id=23415501

http://nypost.com/2014/02/28/ackman-to-expose-herbalife-fraud-in-china-on-march-11/

http://finance.yahoo.com/q/ks?s=HLF+Key+Statistics