Replies to post #822 on NSS ~ Counterfeiting Stock ~ MM Games Played

[AlanC]

Porsche Wins Dismissal of Fund Lawsuits Over $2 Billion Losses
January 02, 2011, 6:47 PM EST

Dec. 31 (Bloomberg) -- Porsche Automobil Holding SE persuaded a judge to dismiss two lawsuits claiming the carmaker cost hedge funds more than $2 billion by misleading short- sellers in its acquisition of Volkswagen AG shares in 2008.

U.S. District Judge Harold Baer in Manhattan yesterday dismissed the complaints filed by hedge funds Elliott Associates LP and Black Diamond Offshore and representing a total of 39 U.S. and foreign-based funds. The suits accused Stuttgart, Germany-based Porsche of secretly cornering the market in Volkswagen shares.

The short sellers claimed that Porsche misled investors by denying through much of 2008 that it intended to acquire Volkswagen and by using manipulative trades to hide its stock positions. Porsche said on Oct. 26, 2008, that it controlled most of Volkswagen’s common stock, causing the shares to surge as short sellers raced to cover their positions.

In his opinion, Baer said he relied on a recent U.S. Supreme Court ruling that fraud claims such as those in the suits against Porsche apply only to securities listed on domestic exchanges and domestic transactions in other securities. Baer said his ruling yesterday applies to other similar complaints against Porsche.

‘Functional Equivalent’

The swaps at issue in the case “were the functional equivalent of trading the underlying VW shares on a German exchange,” Baer wrote. “Accordingly, the economic reality is that plaintiffs’ swap agreements are essentially transactions conducted upon foreign exchanges and markets and not domestic transactions.”

Porsche took another step toward its planned merger with Volkswagen, based in Wolfsburg, Germany, and Europe’s largest carmaker, after the company’s shareholders on Nov. 30 backed a 5 billion-euro stock sale to lower debt. The sports-car maker agreed to combine with VW in August 2009 after a failed attempt by Porsche to gain control of VW.

The court also dismissed claims against Porsche SE’s former chief executive officer, Wendelin Wiedeking, and its former chief financial officer, Holger Harter. Porsche announced the ruling in an e-mailed statement yesterday without commenting on it.

David Parker, a lawyer representing Elliott Associates, didn’t immediately return a call seeking comment after business hours.

The case is Elliot Associates, Black Diamond Offshore, Ltd. v. Porsche Automobil Holding SE, 10-0532, U.S. District Court, Southern District of New York.

--With assistance from Thom Weidlich in New York and Ben Livesey in San Francisco. Editors: Peter Blumberg, Fred Strasser

To contact the reporter on this story: Joel Rosenblatt in San Francisco at [e-mail].

To contact the editor responsible for this story: David E. Rovella at [e-mail].
http://www.businessweek.com/news/2011-01-02/porsche-wins-dismissal-of-fund-lawsuits-over-2-billion-losses.html

[fourkids_9pets]

thanks for that read

here's the part that makes my heart bleed
for the hedgies ... you know i'm kidding :)

The hedge funds alleged they were victimized when Porsche quietly bought nearly all the freely traded ordinary shares of Volkswagen as part of a plan to take over the company, contrary to its public statements that it had no plans to do so.

When Porsche revealed its holdings in October 2008, shares of VW soared, briefly making the company the world's biggest by market value.

This caused losses for the hedge funds, which had entered swap agreements and would have benefited from a decline in price.

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gee a taste of their own medicine .. except for one teensy
detail .. porsche ACTUALLY BOUGHT those shares in the open
market .. no tricks .. no swaps .. no collusion .. no minions
posting FUD 24/7 .. oh my .. sure hope a few ceo's are paying
attn to what they did :)

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4kids
all jmo