Friday, 25 July 2014
Last updated 16 hours ago
Mar 1 2011 | 12:44pm ET
A New Jersey hedge fund manager has sued the author Michael Lewis and FrontPoint Partners’ Steven Eisman for, in effect, making him look stupid.
Harding Advisory’s Wing Chau accused Lewis and Eisman of defaming him in Lewis’ bestselling book, The Big Short: Inside the Doomsday Machine. Lewis’ book, which was released a year ago, covered the rise and fall of the housing bubble and the creation of the credit default swap market.
According to Chau, the book depicts Eisman—who made a killing on the collapse of the mortgage market—as a far-sighted hero, while Chau, in a reported conversation with Eisman, comes off less well.
“The entire passage depicts Mr. Chau as someone who ignored his professional responsibilities, made misrepresentations to investors, charged money for work that was not performed, had no stake in the [collateralized debt obligations] he managed, was incompetent or reckless in carrying out his responsibilities, and violated his fiduciary duties by putting the interests of ‘Wall Street bond trading desks’ above those of his investors,” the lawsuit alleges. Chau says those conclusions, drawn from Eisman’s statements and memory, are untrue.
Lewis’ book depicts Chau and others as “villains” who were “responsible for the crisis,” Chau alleges.
As for Eisman, Chau’s lawsuit throws about some allegations itself, saying the FrontPoint star manager “has a well-known reputation for being offensive. Even on Wall Street, people think he’s rude, obnoxious and aggressive.”
Chau is seeking “redress” in the form of unspecified damages.
“Suits like this one are an unfortunate fact of life in our industry, particularly when a book is as successful as this one has been,” Drake McFeely, president of Lewis’ publisher, W.W. Norton & Co., said. McFeely said he was confident that the lawsuit would be dismissed.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…