Gerova Investors Pursue Alleged Short and Distort Market Manipulation Scheme, Says Gross Law
SAN FRANCISCO, CA--(Marketwire - Dec 22, 2011) - Gross Law filed a lawsuit on behalf of Noble Investment Fund Limited ("Noble") claiming millions of dollars in investment losses in Gerova Financial Group ("Gerova") as a result of a "short and distort," or "reverse pump and dump," scheme that had the purpose and effect of artificially depressing the share price of Gerova.
The complaint alleges the defendants and their co-conspirators amassed huge short positions (including many illegal naked positions) in Gerova's stock in late 2010 and early 2011, immediately before the company was to complete two major mergers. The complaint further alleges the parties launched a coordinated attack on the company's reputation by using the website zerohedge.com and providing information to Forbes.com blogger Neil Weinberg, who published articles based on that information. Ultimately, Gerova lost approximately $800 million in market capital in less than two months and, according to Gross, Noble and other investors suffered massive losses. Noble's shares, in particular, for which it paid $5.75 million as one of the company's original investors, were worth approximately $17 million prior to initiation of the alleged attack; they are now virtually worthless.
"Defendants and their co-conspirators like to portray themselves as on the side of investors," said Stuart G. Gross, managing attorney at Gross Law, "but in reality these people make money by destroying the investments of others." Gross continued, "The decision by Noble to step forward and pursue claims against those who perpetuated this attack upon Gerova and its investors is commendable and it sends a clear message: these schemes constitute securities fraud, and the schemes' victims will not sit back and leave the perpetrators of such schemes in peace."
Among the defendants is Dalrymple Finance.
"The size and timing of the short positions taken against the company, the timing of their settlement, and the timing of the release of false and misleading information concerning the company were all orchestrated too perfectly to be coincidental," said Gross.
As the complaint alleges, the statements made by defendants and their co-conspirators concerning Gerova were demonstrably false and misleading. However, the complaint states defendants and their co-conspirators were savvy users of the financial blogosphere, weaving statements in such a way to quickly lend their false and misleading statements increased reach and creditability. Subsequent effects on Gerova's stock price, combined with the hugely increased short-selling positions by defendants and their co-conspirators, effectively led to the collapse of Gerova's share price. That was followed by the collapse of the planned mergers and, in Noble's case, losses of millions of dollars.
Gross Law is located in San Francisco and serves international and domestic clients in commercial, natural resource, environmental, antitrust and business practices litigation before courts and tribunals throughout the United States.
The lawsuit, known as Noble Investment Fund Limited v Keith Dalrymple, Victoria Dalrymple and Dalrymple Finance, No. CGC-11-516822, was filed in The Superior Court of the State of California, county of San Francisco. Noble is seeking compensatory and punitive damages, restitution, disgorgement, and injunctive relief.
Contact Information
Contact:
Stuart G. Gross
Gross Law
(415) 671-4628
Email Contact
Posted by Abuse of Law at Monday, December 26, 2011
