ValueAct Hires Boies For U.S. Disclosure Case

Apr 22 2016 | 7:10pm ET

Jeff Ubben’s activist hedge fund ValueAct Capital has hired renowned corporate attorney David Boies to represent it in a lawsuit filed by the U.S. government that could have implications for a wide swath of the institutional investment community. 

Boies famously represented the U.S. Justice Department in its anti-trust case against Microsoft, and has represented a wide range of high-profile clients including IBM, former Vice President Al Gore, George Steinbrenner and hedge fund billionaire Steven Cohen. Formerly with Cravath, Swaine & Moore, Boies has significant experience in anti-trust law. 

The lawsuit alleges ValueAct violated U.S. antitrust statutes when it improperly classified portfolio positions in oilfield services companies Halliburton and Baker-Hughes, which announced plans to merge in 2014, as passive – and therefore exempt from disclosure requirements – despite taking an activist role with executives. The merger plans have subsequently been abandoned. 

ValueAct disputes the allegations, saying things like access to management, due diligence and engagement with other shareholders are basic shareholder rights. The case raises questions about where exactly the line exists between a fund’s passive ownership of an equity stake in a company and an activist “intent” aimed at effecting material changes. 

In addition to alternative investment managers, mutual funds and other large institutional investors are also watching the case closely. Accordingly, the case could take years based on similar cases antitrust regulators have brought against investors, according to Reuters. 

San Francisco-based ValueAct Capital was founded in 2000 by Ubben, a former Fidelity executive. The firm manages more than $16 billion and its executives have served on the boards of more than 38 companies, including Microsoft, Adobe, Valeant Pharmaceuticals and Motorola. 

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