Monday, 29 August 2016
Last updated 22 min ago
Aug 26 2010 | 11:57am ET
AR magazine will respond next week to Elliott Management’s move to force the publication to hand over the identity of the person who leaked the magazine a copy of the hedge fund’s most recent investor letter.
AR said it would file a response affidavit on Sept. 2, a week before a scheduled hearing on Elliott’s motion to compel discovery. In its own Aug. 19 filing, Elliott asked for an emergency order because the publication of the letter would cause “significant harm to Elliott and negatively affect its competitive advantage in the market.”
The hedge fund did not seek to prevent AR from publishing an article about the contents of the letter, which it did on Aug. 2. It’s unclear what Elliott found particularly damaging about that letter—AR and other publications have previously used information from the firm’s letters, without legal incident. The most “explosive” revelation is that Elliott chief Paul Singer is unhappy about his firm’s above-average returns, which stood at 5.3% through the first half. AR also reported that Elliott as raised another $1.1 billion and disclosed some of its investment positions.
Elliott said, in its court filing, that it would be able to determine the identity of the leaker via a unique watermark. The hedge fund hopes to take legal action against whoever turned the letter over to AR, in contravention of the firm’s confidentiality policy.
Still, the legal action against AR comes as a surprise.
“Elliott’s legal action is an unusual move even in the opaque world of hedge funds,” AR wrote on its Web site. “This is believed to be the first time a hedge fund manager has taken legal action against a publication in an attempt to uncover a source.”