Friday, 28 October 2016
Last updated 32 min ago
Jul 5 2007 | 9:28am ET
Accused by a former client of incompetence in a $465 million lawsuit, hedge fund administrator GlobeOp Financial Services has shelved its planned initial public offering, originally planned for today.
Harrison, N.Y.-based GlobeOp had planned to raise some £52 million in a floatation on the London Stock Exchange, but delayed the listing after the lawsuit. In conditional trading—begun last Friday—GlobeOp shares rose as high as £2.64, before declining to its initial price of £2.55 when the firm asked the LSE to suspend trading.
In a statement released through the LSE's Regulatory News Service, GlobeOp denied the charges of Archeus Capital Management, which filed suit in New York against the administrator, blaming it for the hedge fund’s failure.
"GlobeOp reiterates its belief that the nature and timing of the lawsuit filed against it on July 2 has been calculated to gain maximum leverage over the company during its IPO," the statement reads. "GlobeOp rejects the claims and intends to conduct a vigorous defense, with the potential to include counterclaims."
New York-based Archeus, which announced it was closing in October, blamed GlobeOp’s alleged “colossal failures” for its collapse.
“GlobeOp acted with reckless indifference to the rights of Archeus, the Animi Funds and their investors in a manner that smacked of intentional wrongdoing,” the hedge fund said in its lawsuit, filed in New York State Supreme Court in Manhattan. “GlobeOp pushed the Animi Funds into a ‘death spiral’ from which they could never recover.”
For its part, GlobeOp made clear that it hopes to reschedule its IPO. "GlobeOp looks forward to returning to the market once the current uncertainty has been clarified," it said in the statement.