Sunday, 24 May 2015
Last updated 1 day ago
Feb 22 2012 | 10:04am ET
A Miami investor is suing a firm run by John Paulson, claiming the hedge fund billionaire failed to do proper due diligence before taking a large position in a possibly fraudulent Chinese timber company.
Hugh F. Culverhouse (whose namesake father once owned the Tampa Bay Buccaneers of National Football League fame) brought a lawsuit on Tuesday against Paulson & Co., and Paulson Advisers of New York, claiming that they caused the Paulson Advantage Plus fund to purchase stock in Sino-Forest Corporation. The suit was filed with the U.S. district court in the U.S. District Court for the Southern District of Florida.
Culverhouse is hoping to get other disappointed Paulson investors to join him, expanding the suit into a class action, according to his Miami-based lawyers—Harvey Gurland of Duane Morris and Lawrence Kellogg of Levine Kellogg Lehman Schneider + Grossman.
Sino-Forest shares, listed in Toronto, plummeted about 70% over two days last June after hedge fund Muddy Waters accused the company of overstating its timberland holdings in China's Yunnan Province.
Paulson told investors that losses from its Sino-Forest Corp. investment totaled some C$562 million (US$574 million). The hedge fund, which once held a 12.5% stake in the company, said it suffered net realized losses of C$105 million over the life of its investment, as it had sold much of its stake between early 2010 and May 2011.
“With just the basic due diligence, the Paulson companies could and should have foreseen Sino-Forest’s problems,” Gurland said in a statement after filing the lawsuit. “Instead, Paulson simply threw money at the company with a shocking disregard for the financial well-being of its investors.”
Paulson & Co. said in a statement that the lawsuit was “without merit,” reports Bloomberg. “As in all our investments, Paulson has access to the same information that everyone else in the securities markets does. Like other public market investors, we must rely on audits and underwriter due diligence for comfort that financial statements and disclosures are accurate and reflect the true state of affairs at companies with publicly traded securities.”
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…