Supreme Court Backs Hedge Funds In Price-Fixing Case

May 29 2013 | 11:19am ET

The U.S. Supreme Court handed a victory to a large group of hedge funds yesterday, letting stand a lower-court decision that cleared them of antitrust violations.

The high court refused the appeal of Atlanticus Holdings, the former CompuCredit Holdings, which alleged that 21 hedge funds violated the Sherman Antitrust Act by conspiring to force it to redeem long-dated convertible promissory notes decades ahead of schedule. The court's decision—and a rejection of Atlanticus' bid for a deferral of consideration—leaves in place the U.S. District Court decision, which found that the hedge funds, including GLG Partners and Akanthos Capital Management, were acting as creditors and were therefore exempt from antitrust laws.

The Supreme Court did not explain its decision.

Atlanticus in 2011 sued the hedge funds, alleging that they had acquired about 70% of the notes as part of a conspiracy to fix prices. The hedge fund refused to participate in a 2010 repurchase offer, and several months later demanded that Atlanticus repurchase the notes at face value—twice the price available on the secondary market.

Harry Niska, a lawyer for the hedge funds, said that the court "correctly held that the existing market practice of a debtor jointly renegotiating its existing debt with multiple creditors does not violate the antitrust laws."


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.