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U.S. Judge Says Porsche Must Face Fraud Lawsuit
A New York Supreme Court judge says Porsche Automobil Holding SE must face a lawsuit from 26 hedge funds that claim the holding company fraudulently misrepresented its intention to acquire Volkswagen AG four years ago.
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A New York Supreme Court judge says Porsche Automobil Holding SE must face a lawsuit from 26 hedge funds that claim the holding company fraudulently misrepresented its intention to acquire Volkswagen AG four years ago.
The judge rejected Porsche's claim that the issues should not be heard by a U.S. court because they involve only claims of manipulation of the German stock market and Germany securities.
The funds claim Porsche misled investors in 2008 by denying it was trying to corner the market for VW shares. The funds, which had bet that VW's share price would fall, suffered massive losses when Porsche revealed its takeover plan in October 2008. The announcement caused VW's shares to surge to a record high.
Porsche's takeover bid eventually collapsed under the $12.4 billion in debt it acquired in the attempt. The holding company agreed instead to sell its Porsche AG sports car company to VW in a deal that was completed last month.
Porsche says the New York court assumed the truth of the allegations without ruling on their merit. The holding company also reiterates its innocence of any wrongdoing.
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