Icahn Asks Judge to Dismiss Herbalife Short-Seller’s SuitChristie Smythe
Carl C. Icahn asked a court to dismiss a lawsuit filed by a short-seller who accused the billionaire investor of improperly propping up Herbalife Ltd.’s share price to settle a score with Bill Ackman.
Daniel Ravicher alleged in a lawsuit filed in March that Cayman Islands-based Herbalife, which markets nutritional products, is an illegal pyramid scheme and that Icahn aided the fraud by publicly promoting the shares. Icahn, 77, called Ravicher’s case “frivolous” in a filing yesterday in Manhattan federal court.
“Plaintiff has not alleged any facts to show that he was deceived by Herbalife or that he acted in reliance on anything Herbalife said, or suffered any injury caused by Herbalife,” according to Icahn’s filing. “Without such facts, he has no fraud claim and therefore no claim against defendant for aiding and abetting any purported fraud.”
Icahn, with almost 17 million shares, a 17 percent stake, is the largest Herbalife individual investor, according to regulatory filings.
Ravicher said Icahn is engaging in a “short squeeze” to inflict financial harm on Ackman, who bested Icahn in a previous legal dispute and has taken a substantial short position in Herbalife. A short sale is a bet against a security, paying off if the price declines.
Ackman in December said Herbalife operated like a pyramid scheme and his firm, Pershing Square Capital Management LP, has sold short about 20 million shares. Herbalife has denied Ackman’s allegations.
The case is Ravicher v. Icahn, 13-cv-01666, U.S. District Court, Southern District of New York (Manhattan).