George Soros Firm ‘Engaged in Insider Trading Before Buying

George Soros Firm ‘Engaged in Insider Trading Before Buying Herbalife Stake’

Posted by on August 6, 2013                                       /   Comments Off

    Category: Accountability   Tags: ,

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By Andrew Trotman, The Telegraph, UK – August 5, 2013

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George Soros is facing allegations that his fund management firm engaged in insider trading before the purchase of a large stake in nutritional supplement company Herbalife, according to reports.

One of the billionaire investor’s top managers is alleged to have leaked details of Soros Fund Management’s purchase of a near-5pc stake in Herbalife before the deal is believed to have been finalised last week.

The claim is part of a complaint reportedly filed with the Securities and Exchange Commission by Bill Ackman, who runs the Pershing Square hedge fund and holds a $1bn short bet on Herbalife.

The filing alleges that a portfolio manager at Mr Soros’ firm attended “idea meetings” with hedge fund managers in the past month, giving investors the chance to make profits by trading ahead of Herbalife deal, the New York Post reported.

Shares in the company jumped 9pc last Wednesday after CNBC ran a story on Mr Soros’ stake-building.

Mr Soros, who famously “broke the Bank of England” by betting against the pound during the 1992 sterling crash, “officially” declined to comment on the stake reports.

“I’m very disappointed with George Soros as I think of him as a humanitarian,” Mr Ackman told the NY Post. “Instead, his firm is trying to profit off the backs of low-income Latinos who’ve been misled that Herbalife is the answer to the American dream.”

Mr Ackman has seen his bet against Herbalife increasingly squeezed as the shares have risen 106.9pc so far this year to $66.60. They hit a low of $27 in December when Mr Ackman revealed his position, urging regulators to investigate what he claimed was a pyramid scheme at the company.

Herbalife, which has said it is a legitimate business that has been operating for 33 years, sells products such as weight-loss shakes and vitamin pills.

Billionaire Carl Icahn, a bitter rival of Mr Ackman, has a 16.5pc stake in the group, worth $1.1bn.

Mr Soros and Mr Ackman did not comment on Monday.

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