In all the recent excitement over Valeant's dramatic fall from grace, investors may have forgotten the "last" alleged mega fraud, one which also involves Bill Ackman but on the other side of the trade, namely Herbalife, which the Pershing Square head has alleged is nothing but a massive ponzi scheme. Ironically it is the stock of Herbalife that has soared in recent years while that of Valeant has tumbled.

Today, however, may be a time for some modest celebrations for perennial Herbalife bear Ackman, because moments ago, Herbalife released an 8-K with some of the most unprecedented data revisions we have seen in a long time, one explaining that the company's "Active New Members" data has been not only completely wrong but massively inflated in the past year. The culprit: "database scripting errors." One wonders if there was perhaps a person who created this database...

This is what it reported:

On March 1, 2016, Herbalife Ltd. (the "Company") identified errant information regarding the Company's new "Active New Member" metric that was provided on certain of the Company's 2015 earnings calls, as outlined in greater detail in the tables below. The Company began tracking this non-financial metric in 2015 in connection with certain marketing plan changes and discussed it for the first time on its second quarter 2015 earnings call. However, database scripting errors led to both (i) the errant inclusion of additional categories of data in calculating the metric for parts of 2015 which were not included in the 2014 and prior period calculations and (ii) quarterly aggregation issues which created variances from period-to-period depending on when the greatest level of activity occurred during the relevant period. The Company did not discover these errors earlier because it had limited visibility into the likely rate of change in this metric upon its first use. The Company has taken corrective action regarding these issues. No information regarding this non-financial metric has been included in any of the Company's periodic reports filed with the Securities and Exchange Commission and the errors do not impact the Company's historical consolidated financial statements.

And this is why investors should never trust non-GAAP data: as Herbalife just admitted, while its GAAP numbers are ok (for now), it was its non-GAAP "growth" estimates which not only pushed the stock higher in the past year but, oops, just happened to be completely wrong.

Some examples of the revisions:

Worldwide, active new members' excluding China revised from +16.7% to +3.2%

U.S. active new members in Q4 2015 vs Q4 2014 revised from +71.0% to +30.7%

North American members in Q3 2015 vs Q3 2014 revised from +33.0% to +1.8%

And so on. The full breakdown of what some could call, with reason, corporate fraud is shown below and can be found in the company's just filed 8-K.

As for the shareholders, their trading accounts certainly appear to have taken a weight-loss shake this morning with the stock crashing 16% in the premarket.