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

As it turned out, we’ll be seeing Toyota’s new super supermini at the 2017 Geneva Motor Show in March. It’s time we all get to meet the new Toyota Yaris...
by - February 23, 2017
Opel revealed it has sweetened the pot for 2017 Insignia Grand Sport customers with the Opel Exclusive program. Through this program, the brand hopes to introduce a wide selection of...
by - February 22, 2017
Fireball Performance Cars has been known to make the fastest sixth generation LT1 Camaros in the world. Once again it has managed to walk the talk as it hit a...
by - February 22, 2017
The North American unit of German premium carmaker BMW is recalling around 19,000 units of its BMW i3 electric vehicle because of the risk of fuel leak. You may ask,...
by - February 22, 2017
A publication by the U.S. Patent and Trademark Office revealed that Honda is still looking into the Project 2&4 Concept. Officially unveiled during the 2015 Frankfurt Motor Show, the Project...
by - February 22, 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