Saturday, 30 May 2015
Last updated 23 hours ago
Aug 29 2013 | 12:34pm ET
The Blackstone Group will pay $85 million to settle allegations that it hid several money-losing investments in advance of its 2007 initial public offering.
The deal ends a five-year-old class-action lawsuit that accused the alternative-investments giant of failing to disclose that three investments were falling in value, increasing the risk that the firm would face clawbacks on its performance fees. The settlement covers both Blackstone itself and individuals names in the lawsuit, most notably CEO Stephen Schwarzman.
The agreement pre-empts a trial over the allegations set to begin on Sept. 16. Plaintiff's attorneys said the settlement represents some 12% of the $691.5 million they believed they could have won at trial; Blackstone raised $4.7 billion in its IPO. Still, David Brower, a lawyer for the lead plaintiffs, pronounced himself "very pleased with the result."
Blackstone will not admit any wrongdoing as part of the settlement, which must be approved by U.S. District Judge Harold Baer, who in 2009 dismissed the lawsuit. Baer was reversed by a federal appeals court in 2011.
May 27 2015 | 2:15pm ET
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