Judges Reject Hedge Funds’ Porsche Appeal

Aug 19 2014 | 6:33am ET

The hits keep coming from both sides of the Atlantic for hedge funds suing Porsche Automobil Holding for alleged market manipulation.

After considering the matter for more than two years, a federal appeals court in Manhattan on Friday upheld a lower-court ruling that dismissed the hedge funds’ lawsuits against Porsche. The U.S. Second Circuit Court of Appeals found that the late U.S. District Judge Harold Baer was correct to throw the claims out on the grounds that Porsche’s secret purchase of a majority stake in Volkswagen occurred abroad.

The alleged manipulation was “so predominately foreign” that U.S. courts could not claim jurisdiction under a 2010 U.S. Supreme Court decision, the appeals panel ruled.

The rejection follows the dismissal of one of the hedge funds’ lawsuits in Germany, where the litigation moved last year under an agreement between the funds and Porsche. Some claims are still pending in Germany.

The hedge funds, which include Elliott Management and Greenlight Capital, could “conceivably” show that U.S. laws might apply to the case, the Second Circuit said. The court said they could refile an amended lawsuit if they chose.


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of

Business Insider has been reporting on the unusual trading activity of a mystery trader who placed a profitable short equity bet to the tune of $21 million on the Aug. 10 move in the CBOE Volatility Index (VIX).