NJ Court Dismisses 'Short Conspiracy' Lawsuit
A New Jersey Superior Court judge has dismissed a multi-billion-dollar lawsuit against Daniel Loeb of Third Point LLC and James Chanos of Kynikos Associates LP that had been filed by a Canadian insurer that accused them of targeting the company in a short-selling conspiracy.
New Jersey Superior Court Judge Stephan C. Hansbury in Morristown said the state had no jurisdiction over the suit filed by Fairfax Financial Holdings Ltd. and dismissed it with prejudice, meaning it cannot be refiled.
Loeb and Chanos are hedge fund managers. The suit is still pending against hedge fund manager Morgan Keegan, manager of Exis Capital Management Inc., and several others. The suit was dismissed in September against SAC Capital Advisors LP, run by billionaire Steven A. Cohen in Stamford, Conn.
Also dismissed Dec. 23 from the suit were Institutional Credit Partners LLC; Jeffrey Perry, an analyst at Third Point; and William Gahan, an analyst at ICP. Third Point, Kynikos and ICP are based in New York.
Hansbury did not comment on the merits of the case in the latest dismissal. Earlier, the judge said there was no evidence SAC was part of a short-selling conspiracy.
Fairfax had charged the hedge fund managers with conspiring to spread negative information about Fairfax in order to make the price of the stock drop.
Fairfax attorney Michael Bowe has said the firm plans to appeal, but he did not return calls for further comment.
William Carmody, attorney for Loeb, says because of the wording in the judge's decision the suit is probably dead. The suit was filed originally in 2006.
The plaintiffs filed in New Jersey rather than New York, where most of the hedge funds involved are located, because of New Jersey's stronger laws, which would have allowed for triple damages, Carmody said. The suit demanded up to $11 billion in damages.
Third Point took the lead among the defendants, Carmody said.
"Third Point has always been vocal about what they were doing and why and it concluded years back that Fairfax was built on a house of cards," Carmody said.
In a statement released after the dismissal, Third Point LLC said, "As our investors know, we have consistently taken the position that this case was a cynical attempt by Fairfax to manipulate the judicial system and to intimidate institutional investors who had legitimate concerns about Fairfax's financial position. This was a blantant case of forum shopping (for a court)."
-Karen DeMasters
Philadelphia Financial To Acquire Hartford Life Private Placement
Philadelphia Financial Group announced it will acquire the private placement insurance business of Hartford Life Private Placement LLC for $117.5 million in 2012.
Philadelphia Financial handles private placement insurance for ultra-high-net-worth clients. Hartford Life Private Placement, Florham Park, N.J., is a provider of insurance and wealth management services for consumers and businesses. It administers corporate and bank-owned life insurance, institutionally owned group annuity contracts and individual ultra-high-net-worth private placement life insurance products.
Philadelphia Financial will now service the $35 billion private placement insurance business of Hartford Life, a subsidiary of The Hartford. No changes are anticipated for the Florham Park employees and no changes are anticipated in the policy terms, investment managers, stable value agreements pricing or other client services, according to Philadelphia Financial.
Reinsurance Group of America is providing financing to Philadelphia Financial for the transaction.
"This acquisition significantly extends our market-leading, ultra-high-net-worth private placement franchise into the bank and corporate-owned arena and provides a long-term relationship with The Hartford," Philadelphia Financial CEO John K. Hillman.
-Karen DeMasters
On The Move
Firstrust Financial Resources LLC, a Philadelphia-based wealth management firm and subsidiary of Firstrust Bank, has hired Lisa Hanson for its wealth management team. Hanson, who has 10 years in the financial industry, previously worked for Hanson Financial Group at Key Advisors in Media, Penn. She has focused on working with women in business and in divorce planning. She also has experience in retirement income planning and financial planning.
Modera Wealth Management LLC has hired Victoria Honsinger Marrone as a senior planning specialist. Modera, based in Boston and Westwood, N.J., is a $1 billion wealth management firm. Marrone will be responsible for managing the firm's integration with Back Bay Financial, which it recently merged with, and collaborating on financial plans and managing investment portfolios. Marrone was the founder of Integrity Financial Planners.
-Karen DeMasters