The complaint makes very interesting reading. If any of it turns out to be true, or should I say provable in court, it will certainly be very damning of the hedge funds mentioned.
The following were Prem Watsa’s comments on the lawsuit in the earnings conference call:
We at Fairfax were reluctant to bring any lawsuit. We have only filed one other lawsuit in our 21 year history, which I might add we were successful on. I continue to believe, as I have said before, that results will out. But it is our fiduciary responsibility to act upon what we learned through the course of our investigation, for our shareholders, employees and our customers.
We initially began looking into aspects of the alleged stock market manipulation in early 2003, shortly after our New York Stock Exchange listing at the end of 2002. Our investigation accelerated in April of this year when we retained the Kasowitz law firm recently. And recently, we were advised by the firm that the facts and circumstances were such that we should prepare and file a complaint as soon as possible. We decided to proceed and we filed a complaint as soon as it was completed.
After today, I plan not to discuss the lawsuit again unless a significant development arises. That said, I want to make it absolutely clear that we have absolutely no qualms with shortselling or short sellers generally. Shortselling can be a valid and appropriate component of any investment or hedging strategy. In fact, we currently have short positions in our portfolio. However, using manipulation and intimidation, as we have alleged, for profit or otherwise should never be tolerated.
Now we are happy to answer your questions. Please give us your name, your company name and limit your questions to only one so that it is fair to all on the call. So, Shirley, we are ready for questions.
This performance seems to me to be less like Patrick Byrne’s of Overstock, and more like Richard Kinder’s of Kinder Morgan>