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| Herbalife trading halted after auditor KPMG reveals alleged insider trading | |
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| Shares in Herbalife, the controversial nutrition company, were halted on Tuesday minutes after US stock markets opened as the company disclosed alleged insider trading by one of KPMG's former partners. | Shares in Herbalife, the controversial nutrition company, were halted on Tuesday minutes after US stock markets opened as the company disclosed alleged insider trading by one of KPMG's former partners. |
| Herbalife's auditor KPMG resigned Monday after firing a senior partner. "KPMG stated it had concluded it was not independent because of alleged insider trading in Herbalife's securities by one of KPMG's former partners who, until April 5, 2013, was the KPMG engagement partner on Herbalife's audit," the company said in a statement. | Herbalife's auditor KPMG resigned Monday after firing a senior partner. "KPMG stated it had concluded it was not independent because of alleged insider trading in Herbalife's securities by one of KPMG's former partners who, until April 5, 2013, was the KPMG engagement partner on Herbalife's audit," the company said in a statement. |
| KPMG disclosed late on Monday that it had fired a partner after it emerged the employee had given information on KPMG clients to an undisclosed individual who then traded shares in those companies. But it did not name the companies. | KPMG disclosed late on Monday that it had fired a partner after it emerged the employee had given information on KPMG clients to an undisclosed individual who then traded shares in those companies. But it did not name the companies. |
| The suspension comes as Herbalife is locked in a bitter fight with hedge-fund manager Bill Ackman, who has called the company "the best managed pyramid scheme in the history of the world". Ackman has called it his "patriotic duty" to bring the company down. | The suspension comes as Herbalife is locked in a bitter fight with hedge-fund manager Bill Ackman, who has called the company "the best managed pyramid scheme in the history of the world". Ackman has called it his "patriotic duty" to bring the company down. |
| At the same time, rival billionaire investors Carl Icahn and Daniel Loeb have made multimillion dollar bets that the company will survive and prosper. | At the same time, rival billionaire investors Carl Icahn and Daniel Loeb have made multimillion dollar bets that the company will survive and prosper. |
| Herbalife is an international multi-level marketing company that sells nutrition, weight-loss and skin-care products. It operates in 88 countries through a network of approximately 2.7m independent distributors. | Herbalife is an international multi-level marketing company that sells nutrition, weight-loss and skin-care products. It operates in 88 countries through a network of approximately 2.7m independent distributors. |
| Last year, Ackman claimed that 1.9 million Herbalife salespeople had failed to make money since the company was founded 32 years ago. Recruits each paid about $2,000 for supplies and training, Ackman calculated, and had collectively lost $3.8bn. | Last year, Ackman claimed that 1.9 million Herbalife salespeople had failed to make money since the company was founded 32 years ago. Recruits each paid about $2,000 for supplies and training, Ackman calculated, and had collectively lost $3.8bn. |
| Herbalife chief executive Michael Johnson had his salary cut by 58% in 2012, according to regulatory filings. Johnson, a former Disney executive, was paid $10.3m in 2012, down from $24.6m in 2011. | Herbalife chief executive Michael Johnson had his salary cut by 58% in 2012, according to regulatory filings. Johnson, a former Disney executive, was paid $10.3m in 2012, down from $24.6m in 2011. |