Herbalife Causes More Headaches for Bill Ackman

Monday was another bad day for hedge fund investor Bill Ackman as his now famous short bet on Herbalife HLF continued higher on positive news.

At the end of the trading day Monday, Herbalife had announced that PricewaterhouseCoopers finished re-auditing the company’s financial statements for the past three years. “There were no material changes to the company’s audited 2010, 2011 or 2012 financial statements,” Herbalife said in a statement.

As a result of the audit, the company filed amended quarterly financial statements with the Securities & Exchange Commission along with an amended annual financial report for 2012.

In April, Herbalife’s auditor, KPMG, resigned and withdrew three years of financial statements because KPMG’s partner in charge of the Herbalife account was found to be engaged in insider trading.

Ackman had said publicly that PricewaterhouseCoopers could be subject to substantial liability because of its auditing of Herbalife due to the company’s non-accounting division doing business with Herbalife in the past.

On the back of the report, shares of Herbalife ended the day about 9.5 percent higher and were up as much as 12 percent intraday. Ackman’s Herbalife short bet continues to go against him as the stock adds to its 132 percent upside move in 2013. According to The New York Times, Ackman’s Pershing Square Capital has lost more than $400 million on the trade even after he reportedly restructured it to ease the losses.

Other hedge fund titans, most notably Carl Icahn and George Soros, have had a great year at the hands of Herbalife. Not long after Ackman revealed his Herbalife short, Icahn and later Soros came out in support of the company causing the stock to rise ever since.

Related: Will Latinos Help Bill Ackman Convince Washington Herbalife is a Pyramid Scheme?

A spokeswoman for Pershing Square said,

“It is not the role of Herbalife’s auditor to determine if the company is a pyramid scheme. Rather, that determination depends on whether distributors earn more from recruiting new distributors than from retail sales to consumers who are not distributors. The few Herbalife distributors that make money earn the vast majority of their profits from recruiting. Herbalife is a pyramid scheme that will be shut down by regulators.”

Ackman continues his fight to convince investors and government regulators that Herbalife is an illegal pyramid scheme. Last month, he said that he would continue the fight “to the end of the earth,” but if other hedge fund giants continue the battle as well, Ackman could have a continued painful road ahead of him.

Disclosure: At the time of this writing, Tim Parker had no position in Herbalife.