American hedge fund managers are suing Porsche for more than $1 billion (£620 million).
Four fund managers - Elliott Associates, Glenhill Capital Management, Glenview Capital Management and Perry Capital - are accusing Porsche, its former chief executive and its former chief financial officer of repeatedly lying about their intention to take over Volkswagen.
The fund managers claim they lost more than $1 billion because they were shorting VW stock - a process of selling borrowed shares in the hope of buying them back more cheaply at a later date and pocketing the difference - in October 2008 when Porsche surprised the stock market by revealing a 75 per cent stake in VW.
Porsche's announcement sent VW's shares rocketing, and as the short sellers scrambled to buy back stock, that drove prices even higher.
The American funds lost more than $1 billion when forced to buy VW shares at the inflated price in order to meet their obligations to return the shares they had borrowed. Porsche profited from the squeeze by selling some of its secretly acquired stock.
Phil Beck, the funds’ attorney, said: “Porsche should be held accountable in a court of law. We’ll do whatever it takes to make sure that the rule of law is upheld."
Reports also suggest that other VW investors may join the lawsuit, boosting claims to as much as $10 billion.
A Porsche spokesman said the company rejected the claim, adding that Porsche had “always abided by current capital markets law”.
Porsche has already investigated the behaviour of Wendelin Wiedeking, its former chief executive, and Holger Harter, its former vice-president of finance, and found no wrong-doing.

 

Why are people in high position so shady. I am pretty sure those execs at Porsche knew what they were doing.

 

Ouch for the fund managers. They got what they deserve. It was their decision to short and they're suing because they made wrong investment decision...? unbelievable. I have no sympathy for stock shorters.

 

Those guys are fools, short sales are one of the most risky things to do, how can they sue someone for making the wrong decision when it comes to shorting.

 

I feel the same way but these moguls must continue to make their billions no matter who they screw

 

I was just telling someone about this today.

Those people, they keep all the profit when they bet right. They will sue for their losses when they bet wrong. How greedy can you get.

 

All this. I wish Porsche counter sues for defamation, or something of the sort, and win.

The nerve of people these days.

 

They'd have to prove Porsche was lying. I would think that with Porsche's attempted buyout of VW backfiring and they themselves being purchased by VW would be proof enough that they weren't lying.

 

sounds like banks dolling out subprime mortgages for the last decade, luckily they have the tax payers to pickup the tab for all the bad loans they made, and made housing unaffordable for the rest of us.

 

I wonder if they had this dude ask for........................1 BILLION DOLLARS