The shares for Herbalife Ltd. decline during the past three months after Bill Ackman, head of Pershing Square Capital Management LP, said he will reveal the Enron-like fraud made by the direct sellers of the weight loss supplements and shakes.

Herbalife Ltd.'s stock dropped down by 11 percent on Monday, resting currently at US$54.02. It is the biggest one-day drop since April 11. Overall, the company's share has fallen 31 percent in 2014. 

Like Us on Facebook

Ackman told his firm that he plans to allot US$50 million of investors' capital to prove the pyramid scheme in Herbalife Ltd. The two-year investigation, which will be released in New York on Tuesday, focuses on the said nutrition clubs of Herbalife.

"Trust me, when you see the stuff we have tomorrow, you will conclude the money was well spent," Ackman said in a Bloomberg Television interview.

He said that the nutrition clubs of Herbalife is like the trading rooms of the proven scam company, Enron Corp.

Pershing Square, a hedge fund company, previously revealed that the nutrition clubs of Herbalife were the "core driver" of the company's pyramid scheme after conducting an in-depth analysis of the clubs.

The presentation in New York will back Pershing Square's claims. Ackman will host the event, which will be held at the AXA Equitable Center. He said that they have hundreds of recorded video hours and documents from the direct selling company that will prove their schemes.

Ackman also invited Herbalife CEO Michael Johnson to attend the presentation and sit "in the front row."

Herbalife responded on the attacks by posting on Twitter, "the truth will prevail."

TagsHerbalife fraud, pyramid scheme, pyramid scam, bill ackman