Earlier today, CNBC reported that George Soros had amassed a large long position in Herbalife—the stock that’s been at the centre of a huge hedge fund war ever since Bill Ackman publicly announced that he’s shorting it.
According to Fox Business Senior correspondent Charlie Gasparino, Ackman’s lawyers are pressing the Securities and Exchange Commission to look at possible market manipulation around the Soros’ Herbalife investment.
Soros’ investment represents less than 5% of outstanding shares of Herbalife or securities rules would have forced his fund to disclose the size of the position with the regulators. However, if his fund purchased shares in concert with other investors, or as a “common group,” that could also prompt a filing of a shared position, securities lawyers say.
No such filing has been made so far. Lawyers for Ackman are prodding the SEC to investigate whether such a shared position exists and whether the leaking of Soros’ position constitutes stock manipulation, according to people with knowledge of the matter.
Ackman, who runs Pershing Square, revealed late last year that he’s shorting $1 billion worth of the stock because he believes it’s a “pyramid scheme.”
Since revealing his short, a number of hedge fund managers snapped up long stakes. Ackman’s arch-nemesis Carl Icahn bought a massive stake and said that Ackman would be the victim of the “mother of all short squeezes.”
And now Soros has joined the side of fund managers going long the stock. The stock closed up more than 9%.
Since Ackman confirmed his short position, shares of Herbalife have risen more than 41%.
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