Porsche Sued by Greenlight Capital, Tiger Global Over Short-Selling Losses

Date: Wednesday, March 16, 2011
Author: David McLaughlin, Bloomberg

Porsche SE, the German automaker, was sued by hedge funds Greenlight Capital Inc., Tiger Management LLC and other funds over $1 billion in short-selling losses.

The funds accused Porsche of fraud, saying it hid its plan to corner the market in Volkswagen AG (VOW) shares, according to a complaint filed today in New York State Supreme Court. The funds had shorted, or bet against, Volkswagen stock and suffered losses when Porsche revealed its holdings.

“Porsche lured the plaintiffs into a trap, making plaintiffs believe VW shares were overvalued while hiding from plaintiffs the risk of a massive short squeeze that would send the price skyrocketing several hundred percent,” they said in court papers.

Porsche was sued in federal court in New York over the same allegations and won dismissal of the lawsuits last year.

Albrecht Bamler, a spokesman for Stuttgart, Germany-based Porsche, didn’t immediately return an e-mail seeking comment after normal business hours.

The case is Glenview Capital LP v. Porsche Automobil Holding SE (PAH3), 650678-2011, New York State Supreme Court Manhattan).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.