A New Jersey court has dismissed a lawsuit filed by Fairfax Financial Holdings Ltd. that accused a group of hedge funds of conspiring with financial analysts to drive down its share price.
New Jersey Superior Court Judge Donald Coburn dismissed the Toronto-based insurance and financial services company’s case with prejudice, preventing similar claims in the future, but without costs, on Wednesday.
Fairfax said it would appeal the decision.
“We strongly disagree with the decision that the massive damage caused by that indisputable and intentional conduct is not recoverable,”said Michael Bowe, a lawyer representing Fairfax in the case.
“We will appeal this erroneous ruling and are confident the appellate court will find there is a remedy for what the trial court has described as ‘a scheme of tremendous proportions’.”
However, Adam Sender, a fund manager for Exis Capital who was included in the lawsuit, said Wednesday that the suit should never have been filed in the first place.
“Our plan is to move forward and work to re-establish Exis Capital as one of the leading hedge funds in the world,” Mr. Sender said in a statement.
The lawsuit was filed in 2006 and alleged a number of U.S. hedge funds participated in a stock market manipulation scheme that “severely harmed” the insurance giant.
The complaint alleges violations of various state laws, including the New Jersey Racketeer Influenced and Corrupt Organizations Act, or RICO Act.
Fairfax, which is involved in property and casualty insurance and reinsurance, investment management and insurance claims management, has operations in the U.S. and Canada.