U.S. Court dismisses hedge-fund lawsuit against Porsche

Article by Christian A., on January 3, 2011

U.S. District Judge Harold Baer in Manhattan dismissed two lawsuits that claimed that Porsche Automobil Holding SE cost hedge funds over $2 billion by deceiving short-sellers in acquiring Volkswagen AG shares in 2008.

The ruling had scrapped the complaints filed by hedge funds Elliott Associates LP and Black Diamond Offshore who represented 39 U.S. and foreign-based funds.

The suits had claimed that Porsche secretly cornered the market in Volkswagen shares. The short-sellers asserted that Porsche misled investors by denying through much of 2008 that it aimed to acquire Volkswagen and by using manipulative trades to hide its stock positions.

On Oct. 26, 2008, Porsche stated that it controlled most of Volkswagen's common stock, resulting to the surging of shares as short-sellers were competing to cover their positions.

Judge Baer said that he depended on a recent U.S. Supreme Court ruling that fraud claims, including the suits against Porsche, apply only to securities listed on domestic exchanges and domestic transactions in other securities.

Baer said that this ruling also applies to other similar complaints against Porsche. Judge Baer wrote that the swaps at issue in the case “were the functional equivalent of trading the underlying VW shares on a German exchange.”

He also stated that the “economic reality” is that plaintiffs' swap agreements are basically transactions that are used on foreign exchanges and markets and not on domestic transactions. [via autonews - sub. required]

Topics: porsche, lawsuit

If you liked the article, share on:

Comments

Recommended

You probably heard about Ford’s CEO Mark Fields’ departure from the company. Fields has spent almost three years with the company, and now, he is going to be replaced by...
by - May 28, 2017
A racing team is claiming that it has managed to break the lap record in its category in the ever-demanding Nurburgring circuit in 2016 while driving a road-going Volvo S60...
by - May 27, 2017
Aside from the officially confirmed BMW 8 Series, the next generation BMW M5 (F90) is getting a lot of attention from the fans, enthusiasts and even potential customers around the...
by - May 27, 2017
Automobili Lamborghini’s preparations for the production of its first ever sports utility vehicle, the new Lamborghini Urus, has reached new grounds as the Italian carmaker is disclosing plans to construct...
by - May 26, 2017
The upscale version of the GMC Yukon body-on-frame sport utility vehicle – the GMC Yukon Denali – has been refreshed for the 2018 model year. It now sports a new...
by - May 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries