Hedge Funds Avoid Dismissal Of Case Against Porsche

Aug 10 2012 | 2:09pm ET

A New York state judge has given the green light to a $1.4 billion lawsuit against Porsche SE filed by more than two dozen hedge funds.

The hedge funds allege that Porsche manipulated the market in Volkswagen shares, secretly acquiring a majority stake in its fellow car company before announcing plans to acquire VW. That plan never came to fruition, thanks in part to the hedge fund lawsuits, and VW in turn purchased Porsche's sports-car franchise, but it all amounts to unjust enrichment anyway, the hedge funds say.

The state court ruling comes more than a year after a federal court junked a hedge fund lawsuit against Porsche, ruling that it had no jurisdiction because VW shares trade on a German exchange.

Porsche continued to press that case even after the New York judge refused to dismiss the lawsuit.

"Porsche SE also continues to maintain that the New York Supreme Court is not an appropriate forum for the resolution of the hedge funds' alleged claims, and that their claims should be heard in Germany, where several of these funds have brought claims against Porsche SE," the company said.

Then again, it's no surprise that the hedge funds aren't interested in placing all their bets on the German courts. In June, a German judge raised doubts about the hedge funds' lawsuit in that country.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note