Washington, D.C. (March 12, 2013) -- The Direct Selling Association (DSA) has reacted to the release by the National Consumers League (NCL) regarding Herbalife International and the Pershing Square hedge fund by acknowledging NCL’s long history of consumer protection. DSA is calling for an investigation of market manipulation by short sellers.
In a letter released today by NCL, the organization asked the Federal Trade Commission (FTC) for a review of the accusations made by short seller hedge fund manager Bill Ackman of Pershing Square against Herbalife International. “DSA has a long history of cooperation and partnership with the NCL on matters of consumer protection and we share the mutual goal of ensuring consumers are treated fairly and honestly,” said DSA President Joseph Mariano. “While we are concerned about the potential for NCL's request to be misconstrued and further allow short sellers to capitalize on negativity in the marketplace, if a balanced examination of the facts is conducted by any truly disinterested party it will result in only one conclusion – that direct selling companies like Herbalife are committed to protecting consumers and creating a better life for their communities, their salesforce members and their customers.”
“I respect NCL and hope that this letter to the FTC will not be used by short sellers to distort the truth about the value of direct selling to millions of Americans,” said Mr. Mariano. “Based on the track record of misstatements of facts and the law by these same short sellers, my concern is for the harm that could be caused to hard working direct sellers as well as consumers who could be negatively impacted by these actions.”
“After months of unsubstantiated allegations and distortions regarding the law and practices associated with direct selling, the only parties actually making claims of wrongdoing are financial moguls who manage billions of dollars in assets and stand to gain millions more when the company’s stock declines. Sadly, the livelihoods of millions of hard-working Americans are being threatened by the greed of certain short sellers,” Mariano said.
Herbalife is a longstanding member of the Direct Selling Association and is subject to the provisions of a strict code of ethics designed to ensure direct sellers practice only the highest standards of business ethics. “By virtue of their DSA memberships, Herbalife and the other 181 DSA member companies have consistently committed themselves to meeting or exceeding not only the requirements of the law, but also the rigorous DSA Code of Ethics,” Mr. Mariano stated.
Mr. Mariano concluded, “I believe consumers stand to gain much more if instead appropriate authorities were to investigate the activities of short sellers who engage in blatant market manipulation at the expense of honest consumers.”
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