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.