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 In decisions made public on Tuesday, U.S. District Judge Louis
Stanton in Manhattan said the plaintiff, Daniel Ravicher, failed to
show that Icahn owed him a duty not to promote Herbalife, or that
the billionaire's actions caused his losses.
Stanton also dismissed similar claims against Bank of America Corp <BAC.N>,
JPMorgan Chase & Co <JPM.N> and Wells Fargo & Co <WFC.N>, which
Ravicher had accused of aiding Herbalife's alleged fraud by
providing $1.2 billion of financing.
The judge said the defendants' actions, even if proved, "are so
remote from Ravicher's alleged injury as to demonstrate the
implausibility of Ravicher's claim."
Ravicher, a Florida lawyer, said he lost more than $75,000 on his
short position in Herbalife, a bet that its stock price would fall,
because Icahn and the banks helped prop up the company and save it
from collapse.
He said he bought put options on Herbalife stock around the time
that billionaire hedge fund investor William Ackman in December 2012
announced his own short bet. Those options became worthless when
they expired in November.
Stanton, however, said that Ravicher could prevail only if he could
show that his purchase of the options imposed a duty on Icahn and
the banks not to help Herbalife.
"That is not only a counter-intuitive proposition, it violates a
principle ("volenti non fit injuria") that one who knowingly and
voluntarily risks danger cannot recover for the resulting injury,"
Stanton wrote, in decisions dated Friday.
Neither Ravicher nor Icahn responded immediately on Tuesday to
requests for comment.
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Herbalife was not named as defendant. In December, it said a new
audit resulted in no changes to its financial statements.
Also last month, Ackman said he and his firm Pershing Square Capital
Management were sticking by his $1 billion short bet on Herbalife.
People familiar with the fund have said the bet led to as much as
$700 million of losses.
In afternoon trading, Herbalife shares were up $2.18, or 3.1
percent, at $72.38 on the New York Stock Exchange. One year ago they
traded at $44.14.
The case is Ravicher v Icahn, U.S. District Court, Southern District
of New York, No. 13-01666; and Ravicher v. Bank of America Corp et
al in the same court, No. 13-03908.
(Reporting by Jonathan Stempel in New
York; editing by Paul Simao)
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