Accusing Them of Operating as a
Group for Short Swing Profits
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE,
June 18 – On the 24th floor of
Federal court in Manhattan a
trial concluded on June 18, in
which hedge funds tried to
show the jury they carefully
avoiding group formation
despite the appearance of
implicit agreements /
concerted
action. The
case is Augenbaum v. Anson
Investment Master Fund LP et
al..
U.S.
District Court for the
Southern District of New York
Judge Arun Subramanian, still
presiding over the Live Nation
antitrust case – and a related
FOIA lawsuit – denied a motion
to dismiss back in
December.
On
June 18 the defense argued,
The trial record is devoid of
evidence that could support
Plaintiff’s claim against
Empery. Investors do not form
a Section 13(d) group by
participating in a parallel
transaction, yet that is all
Plaintiff’s case in chief
demonstrated as to Empery.
Instead, a Section 13(d) group
is formed for purposes of
Section 16(b) where beneficial
owners agree to act together
to pursue a common objective
with their investment power.
Plaintiff has failed to meet
his burden. After five days of
trial and admitting more than
ninety exhibits into evidence,
Plaintiff did not adduce any
proof that Empery agreed to
act in concert with any other
investor or pooled its
holdings in furtherance of a
common objective. In fact, the
record establishes the
opposite.
Later on
June 18 Judge Subramanian had
the closing arguments run back
to back into the early
afternoon. By 5 pm the
verdict: no liability for the
defendant hedge funds. They
and their lawyers
congratulated each other and
then headed out, in the
streets still full of detritus
from the New York Knicks
victory parade.
More on X for
Subscribers here
and Substack here
The case is
In Augenbaum v. Anson
Investment Master Fund LP et
al., 1:22-cv-249 (Subramanian)
***
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