Angry Money Manager Sues Author, Eisman Over ‘Big Short’ Claims

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.


In Depth

Delayed Flash Crash Arrest Highlights Difficulties Detecting Fraud

Apr 23 2015 | 7:19am ET

The five years it took regulators to bring high-profile charges against a UK trader...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Opportunities Ahead: Asian Fixed Income and Currency Markets

Apr 24 2015 | 6:18am ET

For hedge funds focusing on Asia, the policy uncertainty, unclear interest rate...

 

Editor's Note