Bill Ackman Insider Trading Trial and Settlement

Bill Ackman's insider trading trial was a significant event in the world of finance. He was accused of insider trading related to Herbalife, a nutrition and weight management company.

The trial was settled out of court, with Ackman agreeing to pay $9.5 million to Herbalife. This was a major development in the case against him.

Ackman's investment firm, Pershing Square Capital Management, had a significant short position in Herbalife at the time of the alleged insider trading. This was a key aspect of the case against him.

Ackman maintained his innocence throughout the ordeal.

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Valeant Pharmaceuticals International agreed to pay $96.25 million, while Pershing Square, a hedge fund run by activist investor William Ackman, will pay about $193.75 million to end an insider trading lawsuit with Allergan.

The lawsuit stemmed from accusations of insider trading after Pershing Square acquired a multi-billion-dollar stake in Allergan in 2014, with Valeant and Pershing announcing a joint bid just a month later, causing the stock to climb 15 percent.

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This gave Pershing about $1 billion in gains overnight, prompting Allergan to file a lawsuit and the U.S. Securities and Exchange Commission (SEC) to investigate possible insider trading.

Both Pershing and Valeant had worked hard to get the lawsuit dismissed, but instead decided to pay the penalty just prior to a scheduled jury trial in 2018.

For Pershing Square investors, including Ackman, the settlement will be costly, with the hedge fund's performance dipping by a further 1.32 percent as funds are used to pay down the $193.75 million claim.

This likely means Pershing Square will close the year down over 3 percent, cementing a third straight year of dramatic underperformance in a raging bull market.

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Pershing Square Investors, a hedge fund founded by Bill Ackman, invested $75 million in Herbalife in 2013.

Bill Ackman's investment in Herbalife was a significant one, with his hedge fund putting up a large sum of money in the company.

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Herbalife's business model, which relies on recruiting independent distributors to sell its products, was a key factor in Ackman's investment decision.

Ackman believed that Herbalife's business model was unsustainable and that the company was actually a pyramid scheme in disguise.

Ackman's investment in Herbalife ultimately led to a high-profile battle between him and the company's CEO, Richard Gottesman.

Ackman's hedge fund lost millions of dollars on the investment, with the company's stock price plummeting after Ackman's public criticism.

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Bill Ackman will likely face trial on Allergan insider-trading claims, which turn on whether Valeant and Pershing Square Capital Management were planning to take their offer directly to Allergan's shareholders or just help facilitate Valeant's bid.

The case is ongoing, with a hearing on the parties' motions for summary judgment still in progress. The judge's decision can help both sides evaluate their positions and provide a foundation for a negotiated settlement.

If the judge sticks with his tentative ruling, Ackman and Valeant will have to prolong their troublesome relationship in front of a jury.

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Allergan issued a similar insider trading suit against Bill Ackman and Valeant, but it was eventually dropped after Actavis bought Allergan, ending the takeover battle.

This isn't the first time Ackman and Valeant have been involved in a lawsuit over insider trading allegations. They were counter-sued by Allergan for allegedly making false claims.

The current lawsuit is still ongoing, with Judge David Carter stating that questions remain about whether Ackman and Valeant shared improper information.

Despite Ackman and Valeant's claims that everything was on the up-and-up, the plaintiffs have alleged that they knew they were in possession of material nonpublic information and acted with the intent to deceive.

The case will proceed unless a settlement is reached soon, adding another legal headache to Valeant's plate.

Bill Ackman will likely face trial on Allergan insider-trading claims. The case centers around whether Valeant and Ackman's Pershing Square Capital Management were planning to take their offer directly to Allergan's shareholders as early as 2014.

The judge's decision is ongoing, and he may still change his mind in his final ruling. The case is In re Allergan Inc. Proxy Violation Securities Litigation, 14-cv-02004, U.S. District Court, Central District of California (Santa Ana).

Ackman and Valeant's partnership initially yielded a paper profit of about US$2.3 billion on the Allergan investment. However, Pershing Square lost US$4.2 billion on its subsequent investment in Valeant.

Ackman attributed the loss to a series of decisions made largely in 2015. He lost confidence in Mike Pearson, the former CEO of Valeant, due to those decisions.

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