Herbalife Investors Breath Sigh of Relief as KPMG Auditor Resignation Not Related to Accounting, Financial Statements
Shares of Herbalife (NYSE: HLF) remain in the spotlight Tuesday as the company announced KPMG would be resigning as an auditor. Herbalife assured the resignation was not related to Herbalife's financial statements.
Traders in Herbalife were kept on the edge of their seats for quite some time Tuesday morning as the company advised the NYSE to halt trading in its stock just ahead of the opening bell. Shares remained halted for about an hour and a half before Herbalife issued an announcement confirming what several sources had reported.
According to Herbalife, "KPMG stated it had concluded it was not independent because of alleged insider trading in Herbalife's securities by one of KPMG's former partners who, until April 5, 2013, was the KPMG engagement partner on Herbalife's audit."
Herbalife said at no point during the periods which drew concern by KPMG where there: ..."any (1) disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreement(s), if not resolved to the satisfaction of KPMG, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its reports, or (2) 'reportable events' as such term is defined in Item 304(a)(1)(v) of Regulation S-K."
A number of traders are calling the news on Herbalife this morning a non event, also questioning why the stock was halted for so long. Despite the action in the name, only around 1.4 million Herbalife shares have traded hands as of 1PM EST. Herbalife normally sees more than 7 million shares traded over the course of a daily session.
Herbalife shares last traded at $38.15, down around 0.6 percent from Monday's close.
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