A US federal appeals court ruled in favor of the dismissal of a legal action started by over 30 hedge funds against Porsche Automobil Holding SE.
The stake owners claimed that the company’s allegedly fraudulent moves to corner the market resulted in huge losses for the hedge funds, but the German automaker managed to persuade the 2nd US Circuit Court of Appeals to dismiss the claims.
“We’re pleased with today’s decision, which we think should finally end the US litigation against Porsche,” said Robert Giuffra, a partner at Sullivan & Cromwell representing Porsche. “Based on the court’s reasoning, we don’t see how the hedge funds can bring a valid US securities fraud claim.”
The court said in an unsigned 48-page decision that the allegations concerning Porsche have in view claimed actions that are too “predominantly foreign” to trigger liability under US domestic securities fraud laws. The hedge funds, including Paul Singer’s Elliott International LP and David Einhorn’s Greenlight Capital LP have started various action class suits against Porsche Automobil Holding SE in US and Europe, as they strive to regain at least $2 billion from the carmaker. Their claim is that the losses were triggered by Porsche’s “massive short squeeze” in Volkswagen AG.