A KPMG partner in April leaked private Herbalife information, causing KPMG to step down as Herbalife's auditor. The insider trading scandal was unrelated to Herbalife's accounting. Herbalife has been waiting for months for reaudited statements to file to the Securities and Exchange Commission.
Bill Ackman, billionaire Pershing Square Capital Management manager, has called Herbalife a "pyramid scheme," or an unsubstantiated investment, that regulators would ultimately shut down.
Ackman has publicly warned PwC that auditing for Herbalife could have consequences. This also comes at a time when Pershing Square has been warding off negative performance.
Meanwhile, billionaire activist investor Carl Icahn said in a CNBC interview, "I'm certainly happy about it. I'd like to say I never really doubted this was a viable company," and said Ackman's claims were "nonsense."
Herbalife stock has more than doubled this year.
[Wall Street Journal]