Blackstone Settles IPO Lawsuit

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.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

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

July/August 2014 Cover

New customer protection rules have landed: Are you ready?

The twin debacles of MF Global and PFG have damaged the reputation of the futures industry demanding an examination of customer protection rules. New rules are being implemented, which will add cost a...

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.