NEW YORK -- Hedge fund investor Bill Ackman is not giving up on his bet against Herbalife despite major losses to his hedge fund and a report that the criminal probe into the health drink company has collapsed.
The head of Pershing Square Capital Management on Tuesday released a new video titled "The American Dream Denied,” featuring people who lost significant amounts of money selling the nutritional shakes. The people also claim they were not been properly warned about the risks involved.
Ackman has accused the Los Angeles-based company of running an illegal pyramid scheme that makes money by enrolling people into the act of selling its shakes rather than through the sale of the product itself.
But his efforts to profit off the allegations by selling the stock short, or betting it will go down, have proven elusive.
Herbalife has vehemently denied the allegations and accused Ackman of stock manipulation. Last month, the Wall Street Journal reported that the Department of Justice probe into Herbalife's business practices, as well as allegations of stock manipulation, fizzled due to insufficient evidence of criminal wrongdoing.
In Tuesday's video, former Herbalife sales people discussed their losses compared to the promises made to them when they joined the company.
One woman said she lost $62,000 despite being told she could make $5,000 a month by recruiters. She also claimed she had not seen a disclosure document saying that the vast majority of people, or 89%, do not make any money selling Herbalife products.
"Herbalife claims that it has cleaned up its act," the video said. "Herbalife victims from around the country reveal a different story," said the video, which Ackman posted to his web site, Factsaboutherbalife.com.