Overview
In an Order today, Judge Stanton dismissed a suit brought by an investor who shorted Herbalife stock and who accused Bank of America, JP Morgan and Wells Fargo of lending money to support Herbalife’s “pyramid scheme,” thereby “preventing Herbalife from collapsing” and rendering his short position worthless:
To sustain his claim [the plaintiff] must argue that it was his purchase of the puts that imposed on the defendants a duty to [him] to refrain from assisting Herbalife in its business. 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.
