Tuesday, March 18, 2014

Nu Skin's patented OPTIONLoc Formula

So last week Nu Skin filed a slew of Form 4's. These were mixed between option awards and restricted stock awards.

Now, if I were a savvy executive at a publicly traded company and I was recently awarded some stock or options, and I thought my shares were grossly undervalued, I'd pay my taxes on the awards via an in-kind withholding of shares.

Guess what seven Nu Skin executives did last Thursday? Guess no more. These awards were performance based awards with varying exercise prices/vesting dates.

I was just thinking that if I were up to get those awards I'd sure as hell want them granted at what I think the bottom of my company's stock price is. Instead of getting whacked on the tax up front, I'd hold them, allow them to appreciate and get my capital gains on too.

Likewise if I thought my company was going to get shellacked in the coming week because we were not going to be able to resolve the late filing of our 10-K, I'd probably wait to claim my shares because I'd much rather ride my award up than ride it down.

Also, if I were an executive at a publicly traded company and my colleagues on the audit committee didn't think we were going to be able to meet our expected March 18th deadline to file our 10-K, an expectation we gave on March 4th (9 days before our stock awards), we probably wouldn't be receiving stock awards to begin with nine days after we set that expectation.

It's hard to award options and restricted stock when your audit committee isn't confident the numbers are solid, particularly when two of the five audit committee members are also on the executive compensation committee.

If it turns out that my reading between the lines is correct I suspect we'll see Nu Skin meet their previously proposed filing date of March 18th (today) and we'll see continued appreciation in Nu Skin's stock price. 

I also think that if Nu Skin's executives are able to successfully navigate their recent issues in China, they deserve whatever stock they were awarded.

Monday, March 17, 2014

The Vander Nat Intent: In Theaters Now

The Vander Nat Intent is not some political spy thriller(although it should be). Instead it is what I refer to the principle by which internal sales are qualified because intent weighs very heavy on the consideration.
For those that actually bothered to read Vander Nat & Keep's forthcoming paper in the Journal of Historical Research In Marketing there are some clues as to how the FTC may treat internal consumption during it's review of Herbalife.
Among many others, the two reference the 2004 Kohm FTC advisory letter. In the advisory letter Kohm states 
...the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme. The critical question for the FTC is whether the revenues that primarily support the commissions . . . are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture. A multi-level compensation system funded primarily by such non-incidental revenues does not depend on continual recruitment of new participants. . .
Kohm continues
The Commissions recent cases, however, demonstrate that the sale of goods and services alone does not necessarily render a multi-level system legitimate. Modern pyramid schemes generally do not blatantly base commissions on the outright payment of fees, but instead try to disguise those payments to appear as if they are based on the sale of goods or services. The most common means employed to achieve this goal is to require a certain level of monthly purchases to qualify for commissions. While the sale of goods and services nominally generates all commissions in a system primarily funded by such purchases, in fact, those commissions are funded by purchases made to obtain the right to participate in the scheme. Each individual who profits, therefore, does so primarily from the payments of others who are themselves making payments in order to obtain their own profit. As discussed above, such a plan is little more than a transfer scheme, dooming the vast majority of participants to financial failure.
In Drs. Vander Nat & Keep's paper they write that the advisory characterized MLM pyramids as organizations that existed to recruit and fund monthly product purchases that qualify individuals for recruitment rewards. They continue that the court warns (in Omnitrition 1996) that the 70% rule cannot be satisfied by a distributor's purchase for personal use because it is not consistent with Koscot Interplanetary.
In a throwback to the struggles Usana faced back in 2007  Keith Winstein wrote the following in the Wall Street Journal:
Deciding what a retail sale is can be tricky. Peter Vander Nat, the FTC economist who co-wrote a 2002 paper on the subject, says it depends on intent.
If people are buying because they want to use a company's products, those sales can count as "retail." If they are buying to stay in the game for future commissions, those sales wouldn't qualify, he said. (I added emphasis)
Usana says it doesn't keep track of distributors' sales to the public, but requires that at least 70% of its products be bought by "end consumers," which includes associates.
I find the FTC economist's comments about internal consumption particularly interesting because they come before his forthcoming paper in JHRM and after Kohm's informal advisory letter in 2002 and after his testimony in Trek Alliance. Taking former and current commentary into consideration, if I am to interpret Dr. Vander Nat correctly it would appear that Dr. Vander Nat is of the opinion that internal retail sales are OK, provided that an individual is not buying for himself or herself simply to maintain their right to receive future commissions. 

Additionally I find it interesting that so many Herbalife distributor/members leave Herbalife each year. If distributor/members were simply buying to maintain a right to their future commissions, I suspect we'd see much higher retention rates than we do coupled with a much higher incidence of inventory liquidations in which those fake internal consumers were simply trying to recoup the cost of the product they purchased so they could maintain their rights to commissions.

The "Vander Nat Intent" has a nice ring to it. I hope he'll consider writing a paper solely on this topic soon.

My Body Started Post-Partum Fat

While trying to stay apprised of developments for the direct sales industry in China and in anticipation of Nu Skin's 10K expected tomorrow, I came across a couple interesting nuggets of information I'd missed recently.

In news recently posted to their Chinese website on March 14th and March 7th  a few things caught my eye.

  1. The company will continue to host its anti-aging Expo in mainland China during the entire month of March.
  2. Nu Skin management is now represented in the Hong Kong Professionals and Senior Executives Association.
  3. The company released  March and April operating hours for it's business hotline
  4. The company has continued releasing promotional materials in March as it had in February
  5. Although they noted a previously schedule training period was postponed, the company noted that Greater China stores were operating normally
I'd have to believe that the online anti-aging expo would be extremely easy for the Chinese authorities to shut down if they were about to destroy the company and the direct sales industry in China. We're halfway through march and the Expo is still on.
After the Chinese authorities decided to look into Nu Skin, the HKPSEA still chose to elect the company's management to it's members; why would they do this if the Party wanted distance? Testimonials from the company continues to be released; again another item that seems like it'd be easily squashed by the authorities. Nu Skin has stated that is operating normally and based on release of scheduling into April, will continue to operate normally in China.

Could this all be an indication that things are returning to normal for Nu Skin in China? I guess we'll find out soon enough.

Another thing I came across in my research was that Chinese pole dancing is not what you'd expect.

Redefine Beautiful Mind

─ ─ Guopei Hua

My body started postpartum fat, always wanted to restore the past slim stature, it has failed to achieve.
Through restart life plan, I began to diet, lifestyle adjustments and with moderate exercise, beautiful waist lines and reproduce. Now, with my body become healthier, more pleasant mood, I finally regain confidence on the body.

Note: The above case is purely to share experience of the respondents do not represent the views of the company.Effect of the product may vary, and with age, ethnicity, family, the environment and the skin condition and other factors.

(note, the above is a google translation. I'm sure it is actually much more eloquent in Mandarin)

Thursday, March 13, 2014

Always Leave your Options Open, (especially suspicious ones)

I am very interested to know who knew about Herbalife's CID before the rest of us knew. Reading Dan McCrum's blog, I was immediately struck by the first line of the post, which was italicized and naturally drew my attention.
After we got in touch with the company to tell them we were writing this story, they halted trading and put out a statement confirming the investigation.
We all remember the fiasco that ensued after it was uncovered Scott London was illegally trading insider information. Mr. London's actions are not the slightest bit defensible, however he was covert about breaking the law. Yesterday, someone decided that overt was a better strategy. 

According to a DealBook post from Alexandra Stevenson and Peter Eavis, Herbalife's lawyers received notification on Tuesday afternoon that they would be receiving a letter from the FTC on Wednesday. Later on Wednesday, Herbalife was halted at 13:18:19 and didn't resume until 13:50:36. I don't know when Mr. McCrum received his tip, but he certainly had to have contacted Herbalife before because they halted the stock in response to his inquiry.

Before the Wednesday halt, while the stock was up roughly 5%, there was a flurry of activity in Herbalife's April options, specifically in near money puts. The trades weren't subtle either. Somebody was hunting puts with an elephant gun. 

With the exception of the 52.50 strikes (which had zero volume) you can walk down the strikes starting at 62.50 and easily see that someone had insider info and was making a play between 11:30-12:30(while shares were trading lightly) on the impending news of the CID. If you think that's a stretch, simply look at all of the other options traded in Herbalife. You could virtually pick any other put with high volume for comparing trading patterns to the April options, but for simplicity, below is a comparison between the March and April 55 strike puts, in which the April puts stick out like a middle finger to the SEC. 

Note that trading in the March puts was virtually non-existent until after the halt and trading resumed. That pattern is the same for practically all non-April expirations.

HLF March 55 Puts
Now, notice the large block trades in the April puts before the halt, and the subsequent churn following the resumption of trading. This pattern is the same for all of the large volume April options listed above.
HLF April 55 Puts

That's a lightning strike of preemptive April put buying right before the halt.

To put these numbers in context, collectively these blocks represent almost all of the put volume prior to the halt and about 60% of all volume for those options for the entire day. If you were to ignore trades after Herbalife resumed, these block trades alone would have increased the open interest by 350%.

This begs the question: if Mr. McCrum knew about the CID, who else knew? 

Based on the Stevenson/Eavis article, it appears that the FTC notified Herbalife council to expect a letter on Wednesday and that Herbalife did not know what kind of letter, or the contents of that letter until they received it yesterday. I contacted the FTC, but they could not offer any additional information beyond the following:
"...since an FTC investigation has been disclosed by Herbalife we can acknowledge the existence of the investigation, but we have no further comment."
That leaves a rather short window of time between when Herbalife would have received the letter, and when they were contacted by Mr. McCrum. I'm sure the FT provided the company an opportunity to respond, but based on lack of additional information I can only assume that there was a short window of time from when they were contacted by Mr. McCrum and when they halted their stock.

I would never expect a journalist to give up their sources, but I'm dying to know where Mr. McCrum poached his information from. I can only think of four places he'd have gotten that information.

  1. Herbalife itself 
  2. FTC source directly leaked it to Mr. McCrum 
  3. The FT illegally obtained the information a la Rupert Murdoch's News of the World 
  4. Indirectly leaked through to a lobbying organization with ties to a government official that had knowledge of the CID, such as a Representative, Senator or State Attorney General.
They could all be wrong, but I think the first three are all extremely unlikely. The fourth option though, particularly a source like an AG's office, seems like the most reasonable explanation and there are nine to choose from. Your guess is as good as mine. 

There is little doubt that dissemination of the CID news was not limited to a single third party (Mr. McCrum) before the news broke; based on the trading activity yesterday it certainly appears that he was not the only person with the information. I think we could all agree that there is no way in hell Dan (or his colleagues at FT) bought over 11,000 put options before the news hit so we'll have to keep hunting.

Whoever knew about the CID is obviously someone that likes to make money, even if they don't get to keep it.

No bueno.

Monday, March 10, 2014

Brent Wilkes Tramp Stamp

While reading the fascinating article by MICHAEL S. SCHMIDT, ERIC LIPTON and ALEXANDRA STEVENSON (complete with almost 70 separate supporting documents) there was a line that really jogged my memory. It was the following sentence that instantly sent me back to the days of my youth, sitting in the chair as the electric hum of the tattoo gun quickly erased the romanticism and allure of permanently altering one's flesh:
Brent A. Wilkes, the national executive director of the Washington-based League of United Latin American Citizens, or Lulac, rejected any suggestion that he had become Mr. Ackman’s tool — even though his organization accepted a $10,000 contribution early last year, and since then has taken a position at the forefront of the anti-Herbalife campaign.
It was my recollection that Wilkes was on the record stating that LULAC had never accepted money from Pershing Square or it's affiliates. Looking through my notes, I could find no such record.  The opposite however, is clearly on the record (or on the rag depending on your view of the NY Post).

Michelle Celarier, who has a demonstrably close relationship with Bill Ackman and Pershing Square, published an article at the end of last month about Herbalife's donations to supportive Hispanic groups. In that article she wrote the following:

Wilkes said Herbalife offered his group financial support last summer, days before he was scheduled to meet with Washington regulators. He turned it down, he said.
Wilkes was scheduled to meet with Lois Greisman and Jessica Rich (both of the FTC) on Monday July 15th; that's a full five months after LULAC hosted their National Legislative Awards Conference and Gala in February of 2013. And why is the LULAC National Legislative Awards Conference and Gala important? Because that event was sponsored in part by Pershing Square's donation of at least $10,000. As pointed out in the NY Times article, the Gala's sponsorship page clearly indicates LULAC received Pershing Square's donation (or pledge to donate) in February 2013 and the Pershing Square logo was being hosted on LULAC's website in February of 2013 as well (http://lulac.org/images/gala13-pershing.jpg)It's no wonder Brent Wilkes turned down Herbalife's summer donation.
Interestingly, one of the 2009 LULAC National Legislative Awards Conference and Gala honorees was non other than The Honorable Antonio Villaraigosa, former Mayor of Los Angeles and current adviser to Herbalife.
In an unrelated article by Bloomberg's Duane Stanford and David McLaughlin, about Herbalife detractors meeting with FTC Chairwoman Edith Ramirez, the two quoted Mr. Wilkes as saying:
“I can tell you she is concerned about the stories she hears and I’m sure as the agency looks at all this they’ll take into consideration our testimony.”
After today's NY Times article I'd venture Chairwoman Ramirez is "concerned about the stories she hears" alright. Based upon the lack of evidence in Massachusetts, Connecticut and Nevada (not to mention the FTC's own consumer complaints records) it seems like stories, and not facts were the only thing on the menu at LULAC's Pershing-sponsored gala.

Getting back to Celarier's recent article, she closed with:
Ackman’s Pershing Square said it made a $10,000 donation to only one of the 16 dissenting groups , Make the Road New York. The money was used, the hedge fund said, to defray costs of a “victim identification survey.”
I added the emphasis there myself.  Although there a couple of assumptions one could make with respect to Mr. Wilkes motivations (sincere or purchased), his offer to return the money to Pershing is like your decrepit college buddy offering you a used condom, for your protection of course. No thanks, I'll go bareback. 

I'm opposed to LULAC returning the money to Pershing Square. If you're going to get a tramp stamp, don't be surprised when people see it after your beltway khakis get pulled down. Getting bagged should not be cause to run out to your local laser specialist and have them burn away the PSQ emblazoned butterfly/ivy/rose thingy embossed directly over your crack. Giving the money back is not going to erase the past or the poor decisions you made.  It's OK to be ashamed of a tattoo, because the tattoo is ultimately the final product of a string of decisions, choices and often relationships leading up to it. Hell I've got a tattoo I shouldn't have gotten, but instead of erasing it, I kept it. I kept it to constantly remind me that being ashamed of your prior mistakes and working to avoid similar mistakes are two entirely different beasts; hiding one's mistakes usually indicates a willingness to continue with the same behavior, but just working harder to avoid getting caught. That is precisely why I think LULAC should keep the money, and instead of buying champagne and petit-fours, they could actually do something useful with it in direct defiance of Pershing's interests, like working to advance the economic condition, educational attainment, political influence, housing, health and civil rights of the Hispanic population of the United States.

Getting back to Pershing's own interests, the spawn of Mr. Ackman and the NY Post presents an entirely different choice that is much clearer; by stating that only one of the sixteen dissenting groups received funding from Pershing Square either Ms. Celarier is again mistaken in her reporting or Pershing went on the record knowingly providing false information. Given how faithfully Ms. Celarier has reported on Herbalife, and given Pershing's convenient disregard for accuracy, I have a very hard time believing Ms. Celarier misquoted Pershing Square. 

I can only hope that if Bill ends up with a tramp stamp of his own, that it's a prison tat inked on his delicate posterior within the confines of a cell owned by Corrections Corporation of America. Brent Wilkes would do well to study that Pershing Square investment and some of its implications before taking up additional Pershing Square causes. 

Friday, March 7, 2014

Global Strategy Group, Director of Communications (or lack thereof)

After mentioning Jennifer Burner and Carolyn Sargent in a tweet about Ackman's planned Herbalife China conference call, Ms.Burner, Director of Communications at Global Strategy Group(one of Pershing Square's Media Relations/Crisis Management/PR firms) DM'ed me out of the blue last Friday February 28th. Most press releases that Pershing Square puts out have either Carolyn Sargent, Jennifer Burner or both listed as the contact. In fact they are both listed as the contact on the press release for the conference call. You can see from the DM's that she really wanted my phone number. She asked no less than three times what my number was and was unwilling to provide her own. Back in December when I posted my beliefs that Mariusz Adamski and Shane Dinneen were no longer at Pershing, even though she and I disagreed on the content of my post, at least Carolyn actually gave me her cell phone number so we could speak. I was very curious why Jennifer wouldn't give me a good contact number in our messages back and forth especially since she is in "communications".

Feb 28
Re: China Questions, Sure-what number can I reach you at?

The Skeptic
Feb 28
Sorry, you're saying he'll take calls?

The Skeptic
Feb 28
just saw this, would've responded sooner.

The Skeptic
Feb 28
what's your cell ph#? I'll give you a call in 10 mins if you want to talk.

Jennifer Burner
Feb 28
Busy right now. I can call you later on if you're free. What's the best # to reach you?

The Skeptic

Feb 28
sorry but, not comfortable giving out my cell. If you have concerns about giving me your# confirm with Carolyn that I gave her's to no one.

Jennifer Burner
Feb 28
Do you have a different number other than a cell?

The Skeptic
Feb 28
If you have any real. Desire to speak with me other beyond counter surveillance you'll give me a # . I swear I will not distribute.

Then she went dark. Even though I suspected she simply wanted my phone number for purposes other than speaking to me, I couldn't completely discount the possibility that she actually wanted to chat about Ackman's planned conference call. So, I called her office. I've only gotten voicemail and I'm a bit disappointed that she won't take my calls, particularly since she seemed to want to talk quite badly to me in her messages. I even called again today and got sent straight to voicemail after being transferred to her line by the receptionist.

Oddly enough, that same day around 4pm on Feb 28th, I received a very strange email. It was a domain activation email from GoDaddy for theskeptic21.com.

The problem is I didn't register that domain. In fact, I haven't registered any domains as The Skeptic. I only have the blogspot venue. A simple WHOIS search returns the following:


  The Skeptic
  200 Madison Avenue
  New York, NY 10016
  United States

  Domain Name: theskeptic21.com

   Created on.............: 2014-02-28 15:43:44
   Expires on.............: 2015-02-28 15:55:42
   Record last updated on..: 2014-02-28 15:43:44

   Whois Server: whois.namesbeyond.com
  Creation Date: 28-FEB-2014
   Updated Date: 04-MAR-2014
Expiration Date: 28-FEB-2015

It was then brought to my attention that somebody was sending around a Herbalife distributor survey yesterday. The signature on the survey was Direct Media Survey

If you also search for all domains registered to the same contact number (+1.9177082367) in addition to theskeptic21.com, another site also pops up. Should you really be surprised that the second site is directmediasurvey.com? Directmediasurvey.com is yet another falsely registered site and is the source of this Herbalife distributor survey. And wouldn't you know, when you WHOIS search this second site it shares the same basic registration information as theskeptic21.com. Both websites used the same fake phone number +1.9177082367 as the registrant contact number and the same address: 200 Madison Avenue in New York. The primary difference between the two is that directmediasurvey.com was created a few days after theskeptic21.com. 

What is pretty hysterical about the whole thing is that whoever is trying to spoof me used my email address to activate registration for theskeptic21.com, which has since been suspended. Their ignorant lust apparently made them forget that the email would come to me and would require my activation. Reasonably enough, I would never activate a domain that I did not register, so I didn't activate it. I am not certain who registered it, but it was not me. At least they didn't make the same mistake twice.

Intriguingly, directmediasurvey.com is hosted and registered via GoDaddy and the domain went live without me ever having received an email. What's interesting is that when you search for both using the phone number both sites come up, but when you search by using the email address originally used to create theskeptic21.com email address as the search term, it creates a different result in which only theskeptic21.com comes up. That indicates the original registrant of directmediasurvey.com registered the domain under a different email address, (so they could activate it) and then retrospectively changed the contact information for the domain. Effectively, they used a traceable email address, which they verified with GoDaddy to register and activate the domain and then went back and updated the domain name contact information in an effort to cover their tracks and point their stinky thumb in my direction.

Couple funny things about the survey is that it reportedly got sent around to Wall Street-types and not Herbalife distributors. Although my modest sense of self importance makes it hard to believe, I suspect that Pershing Square, Global Strategy Group and Rubenstein view me as some sort of a threat and perhaps they concocted the domain registrations and the survey in an effort to compromise me in some manner. Either that or some short investor spun up the whole thing. I can only assume that whoever is responsible falsely registered the two knowing full well they were falsely using my information to register and that it would perturb me and force me to respond in some way. Whoever did it must be extremely naive though. In addition to being very easy to debunk and deactivate those domains there are some interesting legal considerations.

The Fraudulent Online Identity Sanctions Act (a.k.a. FOISA, H.R 3754)  created some pretty serious penalties for those who submit materially false contact information in connection with a domain name used to commit a crime or engage in online infringement. In addition to shifting relief to punitive from injunctive in non criminal cases, if one were shown to materially submit false contact information in connection with enacting a felony, it automatically adds seven years on top of the sentence received. No negotiation, no pleading, just seven more notches on the bedpost of your federal penitentiary bunkmate. That's serious time for any midtown softy convicted of, oh I don't know, securities manipulation maybe?  

I guess that after yesterday's press conference in honor of NCPW2014, I shouldn't be surprised about the false attribution. NY AG Schneiderman revealed the top ten complaints received for the state of New York, and number one on the list? Internet (privacy issues; spyware; consumer frauds) with 4,753 complaints.

And for the record, I emailed both Jennifer Burner and Carolyn Sargent asking if  
"any member of Global Strategy Group or Rubenstein, their affiliates, assigns, agents or clients participate in any way in falsely registering domains under my contact information?" 
Despite their prior interest in talking to me, I have not heard back from either Global Strategy or Rubenstein.

Thursday, March 6, 2014

The fattest finger is the middle one

Zero Hedge is pithy, engaging and snarcastic.  I particularly enjoy reading Tyler Durden's posts. He posted yesterday about the FTC retweeting a Canadian Herablife permabear that seems to be short the stock and long a certain Torontonian Rob Ford-like apoplexy (http://www.zerohedge.com/news/2014-03-05/ftc-retweet-endorsement-herbalife-shareholders-are-dying-know). Winter in Toronto is tough, so I sort of understand the rage. Not to mention there appears to be plenty of rage on both the long and short side.

I was admittedly very intrigued by the possibility ZH had uncovered a previously unnoticed linkage between this otherwise uninteresting and uninformative interaction during the #NCPW2014 chat session between a Federal Regulatory agency with ~21K followers and an otherwise unknown, anonymous twitter user like myself. It was an alluring concept to think that the FTC was somehow exhibiting a bias in the questions they responded to. As much as markets love certainty, I was sort of disappointed that they clarified they were simply following the pre-stated policy. Fizzle fo shizzle, oh wizzle.

You can see for yourself in ZH's updated post, the twitter stream and in the FTC response that the FTC was simply following the guidelines they provided for the Q&A.
During the session, it looks like the FTC directly retweeted and answered about 10 questions. Edith Ramirez even hopped on the chat to participate. Although I was disappointed there was no fat finger, and no hidden bias, I thought the chat session (embedded at end of post) was an engaging way to provide access to government officials that is not normally available to your average citizen/visiting alien/trading algorithm. I really hope the FTC and other agencies continue to host such sessions.

What I found more useful than the interaction ZH wrote about was the answer to another question from a consulting firm (more appropriately named Whelan, Whelan and Whelan) in which the FTC revealed that some of the top complaints for 2013 were ID Theft, Imposters, Autos, Mobile and Phantom Debt. A few days prior to the chat the FTC fully disclosed in their annual Consumer Sentinel Network report the Top 30 complaints registered last year. The report is very informative and aggregates a tremendous amount of data in a very user-friendly format. If you dig into the data a bit, of all 2,101,780 complaints collected by the CSN, 1,829 of them were for the "Multi-level Mktg\Pyramids\Chain Letters" subcategory of Business and Job Opportunites Fraud complaints, representing 0.09% of all complaints. For a random comparator that is 1/4 the number of complaints received for Payday Loan services (9,804) and less than 1/2 the number of complaints received in the Student Loans category(5,627) and a tad more than those received in the Social Networking Service category (1,661).  I'm not advocating that Sallie Mae, Cash America or Facebook are good shorts, but based on this data would it appear that MLM companies such as Herbalife, Nu Skin, Avon, and Tupperware represent a credible threat to US consumers? Even if you assumed that ONLY these four companies were responsible for every single one of the 1,829 complaints in the category and not a single one of the twelve other publicly traded MLMs had a complaint filed against them, this would represent about one one hundredth of 1% of those four companies customers. If you push that further to assume that all 1,829 complaints were filed solely against Herbalife, that would still only be six one hundredths of 1% of their US customers. Considering that in 2012 Herbalife only had a little over 200 complaints filed against it in the CSN you can begin to understand why I think Pershing Square resorted to lobbying their Herbalife short thesis, even though they should have been exiting it.

Oddly enough, there were only six metropolitan areas in Massachusetts that even made the complaints per capita list, all ranking very low for fraud complaints (I had no idea lobsters were such satisfied consumers).  In a city where I feel like I could easily get extra fraud  sprinkled on my onion-crunch dog, I was also proud to see that the entire New York metro area did not even make the top 100.

Number 1 on the list was Homosassa Springs, FL. With a median age of 54 and 93% Caucasian, I can only imagine what the number one complaint was; not enough monkeys on Monkey Island maybe?

You wouldn't believe what metro area was number 4 on the list; Washington-Arlington-Alexandria. Maybe lobbying fraud is contained in the "other" category.

Based on the FTC's #NCPW2014 chat forum, maybe I'll get lucky and the SEC will host a #NIPW2014 session. I've got my questions ready and waiting. Maybe I'll be first in the queue and the SEC intern will follow protocol, retweet me and the internet will alight with the soft clicking glow of fat-finger theories and questions about how trading in Herbalife securities. I doubt that'd ever happen though since regulatory agencies like the FTC and the SEC would never ever confirm/deny/discuss any potential investigations.