Bill Ackman has another enemy in the Herbalife fight: George Soros

Fighting words.
Fighting words.
Image: ICHPL Imaginechina via AP
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The fight over nutritional products company Herbalife just got uglier. Activist investor Bill Ackman has accused the George Soros hedge fund of violating insider trading rules when it invested in Herbalife. Ackman has reportedly filed a complaint with the US Securities and Exchange Commission regarding the allegations.

Last week, the media reported that Soros’s fund had acquired a stake in Herbalife. Ackman’s complaint alleges that Soros staffers told other hedge funds about that investment, which violates insider trading rules. Herbalife shares went up by more than 7% on the Soros news.

Ackman has a short position on Herbalife, and has accused the company of being a pyramid scheme that doesn’t have real customers. He recently questioned Herbalife’s earnings, which have consistently exceeded analyst expectations.

So far, the Herbalife investment has been a bad bet for Ackman since rival Carl Icahn has been fighting for the other side. The two got into a public spat over Herbalife on CNBC. Now Soros has joined Icahn’s side.

Ackman has been harsh in his Herbalife critiques, but to accuse another hedge fund of insider trading takes the fight to the next level. He’s already in long-running legal disputes with Icahn. Soros may be next.