Hedge funds are a high risk investment for the reason that an investor can lose everything at the drop of a hat. The idea of a hedge fund investor suing over an unsafe investment appears equivalent to a gambler suing a casino for taking their bet. Who are these wealthy bastards that are currently seeking punitive and compensatory damages? They are same men and women who got rich off the mortgage crisis. After bidding the bubble would burst, they ran around filling their pockets with cash.
The suit against Paulson implies lack of due diligence when investing in foreign securities. This class action suit hopes to recover $75k per limited partner. Since Paulson's Hedge had invested approximately 14 percent in the corporation, their limited partners' capital accounts incurred estimated losses of $460 million. However, when they note the gains received prior to the losses, the money lost by Paulson's Funds is estimated to be about $105.3 million. The number of class members is still unknown, but is believed to be hundreds or even thousands. If there are "thousands" of class members, then the payout they're asking will amount to double or triple the amount lost.
The Plaintiff, who is a lawyer himself, has obtained an experienced council in hedge fund class action litigation. Hugh Culverhouse Jr. followed in his father's footsteps of ambidexterity. His father once convinced his own wife to sign a post-nuptial agreement indicating she would give up her half of the estate. This was per advice of some lawyer friends who then became the trustees upon his death. They then paid themselves bonuses of $4.35 million, and once found out an additional $3 million to remove themselves as trustees.
Sino-Forest obtained a listing on the Toronto Stock Exchange via a reverse takeover of a latent Canadian firm and was brought down by Muddy Waters on June 2, 2011. The Muddy Waters report raised apprehension by exposing them for questionable conduct and questioning the legitimacy of company. The absence of corporate internal auditing as well as the fact that they do not have any land or timber as those can only be owned by the Chinese government causes one to wonder what there was to invest in. Following the heavily scrutinizing report of Muddy Waters, Sino-Forest shares fell roughly 70%.