On December 22, 2012, hedge fund manager Bill Ackman gave a three-hour presentation outlining why he believed Herbalife — a 33-year-old, multibillion-dollar, publicly traded nutritional supplement company — was actually an illegal pyramid scheme. Ackman argued that regulators at the US Federal Trade Commission (FTC) should immediately shut Herbalife down. He was so confident in Herbalife’s illegality that his hedge fund, Pershing Square Capital Management, placed a $1 billion bet against Herbalife’s stock price. Federal regulators would soon step in, he predicted, and Herbalife’s value on Wall Street would drop to zero.
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