Shares of Herbalife trading again after auditor news
The multi-level marketer said that KPMG resigned after a former partner leaked inside information.
Trading on the stock was halted Tuesday as the multi-level marketer announced the resignation of its auditor, KPMG. The accounting firm said the person overseeing its Los Angeles audit office leaked confidential information to a third party who traded on the knowledge, Bloomberg reports. The partner, who wasn't named, has been fired.
The quality of Herbalife's financial audits is not a concern, according to the company. KPMG, however, was forced to withdraw its audit reports for the last three fiscal years because of questions about its independence.
Shares of Herbalife were halted for several hours on the New York Stock Exchange and began trading at about 11:30 a.m. ET. After trading resumed, shares fell by less than 1%.
Herbalife, which sells nutritional supplements and personal grooming products, has extensive operations in Los Angeles. Its corporate headquarters, however, officially are the Cayman Islands. According to The Wall Street Journal, KPMG became Herbalife's auditor in December.
Herbalife asked the New York Stock Exchange to halt trading in the stock. Shares of Sketchers (SKX) were also halted for the same reason.
Herbalife has been in the news for months as three well-known investors have staked out claims on the stock. Hedge fund tycoon Bill Ackman has argued that the company is a pyramid scheme, making a huge short bet that will pay off if the stock price declines. That view is disputed by billionaires Carl Icahn and Daniel Loeb, who have amassed sizable long positions in the stock.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
- The Nutella thieves strike again
- Sears, Wal-Mart portrait studios shut down
Copyright © 2014 Microsoft. All rights reserved.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'