[December 17, 2014]

Video Released by Pershing Square Capital Management Exposes Senior Distributors Admitting that Herbalife Uses a "Level of Inauthenticity," leading to "Eventual Deception"

Pershing Square Capital Management today released a video showing top Herbalife distributors acknowledging in their own words that its business opportunity leads to "eventual deception" and that the Herbalife pitch involves "a level of inauthenticity" to recruit new victims into the scheme.

The full video, in frank admissions by top Herbalife distributors, underscores that Herbalife is a pyramid scheme, incentivizing distributors at all levels to focus their efforts on recruiting new distributors into the scam rather than selling Herbalife products to genuine retail customers outside the distribution network. An eight-minute video containing excerpts from the three-hour event can be found here.

The never before seen footage comes from a meeting of distributors with Herbalife corporate management and senior and mid-level Herbalife distributors in Anaheim, California ahead of the 2005 Herbalife University weekend-a large training event for Herbalife distributors that the Company organizes and hosts.

Several members of the Company's management and Board of Directors-including Leslie Stanford, then a member of the Board and Chairman's Club, and current Herbalife Senior Vice Presidents Rob Levy and Bruce Peters, and Vice President Mike McKee-were present and participated in the 2005 meeting.

The key speaker for the Herbalife-sponsored event was Stephan Gratziani, a senior President's Team Herbalife distributor whom the company handpicked to give a motivational speech to help attendees run "successful" Herbalife distributor organizations. Mr. Gratziani is now a Chairman's Club member with 8 President's Team lines, 31 President's Team members, 84 Millionaire Team members and 500 GET Team members. A profile of Mr. Gratziani, who has been involved with Herbalife since 1991, can be found here. /p>

On misleading potential distributors and customers about the deceptive business model:

• "There are some people that if they heard what we are talking about in this room, you know, I'd have to have a bulletproof vest on right now." (Video 1, 27:16.)
• "We sell people on a dream business, that they can make it. Yet deep down inside, what do we really know? Yeah. We know that the reality is that most of them aren't going to make it." (Video 1, 1:00:16.)
• "We tell people, hey, you know, sign on the dotted line, you know, start working from home, it's going to be unbelievable, you're going to have this incredible life. . . . So there really is this situation or this level of inauthenticity that's there." (Video 2, 8:28.)

On the difficulty of succeeding as an Herbalife distributor:

• "Who wants to bring their family into a struggle to make it? Who wants to bring their family into an eventual deception?" (Video 2, 7:20.)
• "[S]uccessful people in retailing in our business, it's a very small percentage." (Video 2, 28:08.)
• "The majority of our people have a difficulty in selling products, in general." (Video 2, 29:46.)
• "'Fake it 'til you make it.' Some of us got so good at faking it, we forgot to make it!" (Video 1, 54:04.)

On the truth about the Herbalife Business model:

• "The Herbalife business model is based on distributors purchasing volume from them. . . . The Herbalife business model, at this point in time, is not based on customers purchasing, it's based on distributors purchasing volume." (Video 2, 14:34.)
• "These sixty thousand people [whom the speaker lost as distributors over the preceding five years], primarily, why do you think they came into the business? Primarily? Primarily? Opportunity! Money! Right?" (Video 1, 46:05.)

We urge interested parties to view the entire video, including a full recap of the video, and other information at www.FactsAboutHerbalife.com.

About Pershing Square Capital Management, L.P.

Pershing Square Capital Management, L.P. ("Pershing Square"), based in New York City, is a SEC (News - Alert)-registered investment advisor to private investment funds. Pershing Square manages funds that are in the business of trading - buying and selling - securities and other financial instruments. Funds managed by Pershing Square are short the stock of Herbalife Ltd and own put options on the Company. Pershing Square may increase, decrease, dispose of, or change the form of its investment in Herbalife for any or no reason, at any time. Pershing Square may change its views about or its investment positions in Herbalife at any time, for any reason or no reason. Pershing Square may buy, sell, cover or otherwise change the form or substance of its Herbalife investment. Pershing Square disclaims any obligation to notify the market of any such changes. Please see the full Disclaimer appearing on website www.factsaboutherbalife.com.

Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20141217005919/en/

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