Bond Insurer May Sue Over Ackman Insolvency Comments

Aug 11 2008 | 10:19am ET

Alleged rumors about Lehman Brothers and Bear Stearns aren’t the only ones that have caught the attention of regulators. Last month, New York State Insurance Superintendent Eric Dinallo suggested that “rumor-mongering” about MBIA Inc. “crossed a line.” The bond insurer apparently agrees, and may sue the alleged rumor-mongerer-in-chief: hedge fund manager William Ackman.

MBIA is “assessing all our options, including litigation,” CEO Jay Brown said. “MBIA agrees that statements [by Ackman] may have violated New York State insurance law.”

Under New York law, it is illegal to spread rumors or make statements “untrue in fact” about an insurance company’s solvency. Ackman, who runs New York-based Pershing Square Capital Management, said earlier this year that he believes MBIA may be insolvent.

Pershing has made millions shorting MBIA shares, which have lost 80% of their value in the past year. Ackman has said the fund will make hundreds of millions more if it were to file for bankruptcy.

 


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note