Hedge fund lawsuit against Porsche dismissal appealed
US District Judge Harold Baer dismissed the multi-billion dollar lawsuit against Porsche on December 30th and the plaintiffs had 30 days to appeal this decision and on January 29th, they officially filed their appeal of the dismissal. Needless to say, Porsche AG plans to fight the appeal with the hopes of moving past these accusations of stock marketing tomfoolery.
The plaintiffs are suing Porsche for the impact of their announcement in October 2008 that they controlled a majority of Volkswagen’s common stock. That announcement caused a massive disturbance in the stock market but the alleged sale fell through – costing hedge fund investors a reported $2 billion dollars. Ironically, shortly after Porsche’s alleged attempt at a stock-based takeover of Volkswagen Auto Group, VW purchased and absorbed Porsche so the two automakers ended up merging but the damage was done in the financial world.
Judge Baer originally dismissed the case against Porsche based on precedent that US fraud laws only applied to stocks bought and sold in the domestic exchange. Since the stock issues at the heart of this lawsuit took place in an overseas exchange market, Judge Baer felt that there was not a case against the automaker. Baer also dismissed charges against former Porsche executives Wendelin Wiedeking (CEO) and Holger Harter (CFO) but there have been no reports of those dismissals being appealed.
Now that the dismissal of the massive lawsuit has been appealed, it looks as though Porsche is not quite out of the woods with their questionable stock practices of 2008. TorqueNews.com will continue following this story as more information becomes available.