A British hedge fund is suing The Wall Street Journal for publishing articles detailing its disastrous performance this year.
At a time when many in the industry and many regulators are pushing for greater transparency, SRM Global, which once managed US$3 billion, alleges that the newspaper published confidential information when it revealed in August that the fund has lost about 85% since inception. The case is set to go before a London court this week.
According to the Monaco-based fund’s lawsuit, the confidential performance data was given to a Journal reporter in London. The firm, founded by former star UBS trader Jonathan Wood in 2006, sought an injunction against the Journal to prevent its European edition from publishing two articles—“Woods Fund Takes A Beating” and “Hedge Fund Suffers Sharp Losses”—hours before they appeared.
“It is to be inferred that the defendant’s editorial staff and those responsible for the publication of the confidential information calculated that the defendant stood to gain more from publishing the articles in flagrant disregard of the claimant’s rights than if the claimant sued,” SRM alleges in its suit.
The Journal and the Financial Times separately published several articles about losses at SRM—which was a large investor in Northern Rock, the British bank nationalized earlier this year, and U.S. mortgage lender Countrywide Financial—during the year. The FT has not been sued by the hedge fund.
The Journal denies that the information was confidential, and calls the articles “responsible journalism.”