Wednesday, 6 May 2015
Last updated 6 min ago
Mar 8 2011 | 12:43pm ET
A financial services company is accusing Third Point founder Daniel Loeb of lying to investors about the firm's research into the Canadian insurer.
Fairfax Financial Holdings' allegation is the latest in a nasty five-year legal battle between the company and a group of hedge funds, including SAC Capital Advisors and Kynikos Associates. Fairfax is seeking some US$6 billion in damages from those firms, alleging that they engaged in insider-trading and conspired to drive Fairfax's stock price down.
According to Fairfax's latest accusation, Loeb told investors in a letter that "the decision to short Fairfax-related positions was one of the "most thoroughly-research investments in the firm's history." But, the insurer alleges, "Loeb could not identify any such research."
"Third Point has never produced any such internal research, and Loeb was forced to admit in his deposition that he did not know what finite reinsurance was, despite the fact that he cited this as one of the bases for believing Fairfax was a fraud."
"One can also only conclude that Loeb lied to his investors—including his New Jersey investors—in order to cover up the illegal conduct in which he participated."
Fairfax's lawsuit is pending in New Jersey state court.
"This frivolous litigation was an obvious attempt to deflect attention from the company's own financial shortcomings," Third Point said.
"Third Point's research regarding Fairfax was borne out when the company was forced to restate its financial statements, erasing over $235 million of shareholder equity just one day after this lawsuit was launched in 2006."
In 2009, Fairfax offered e-mail evidence that SAC and Kynikos received advanced word that an analyst at Morgan Keegan was going to issue a negative research report about Fairfax.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…