Investor Lawsuit Against Listed Hedge Fund Tossed

Feb 16 2012 | 2:48am ET

A federal judge has junked a lawsuit against Polygon Investment Partners and a subsidiary because the shareholder bringing the case bought the fund long after the alleged malfeasance occurred.

U.S. District Judge Jed Rakoff dismissed the lawsuit, filed last year, ruling that Daniel Silverstein failed to meet the basic pleading requirements for the case. Silverstein bought shares of listed hedge fund Tetragon Financial Group in 2010, but accused Tetragon Financial Management and parent Polygon of writing down its net asset value in 2008 to a number below fair market value, allowing the firm to collect larger fees when the credit markets improved.

"Even if some conduct that was the basis of the complaint continued to occur after the plaintiff bought his stock, it is clear that he did not own stock throughout the course of activities that constitute the primary basis of the complaint."

Silverstein's lawsuit, which also named Polygon founders Reade Griffith and Patrick Dear, accused Tetragon of collecting almost $205 million in "unjust fees." Tetragon has denied any wrongdoing.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…