A jury in Morristown, New Jersey has sided with a Canadian company that accused a group of hedge funds of conspiring to drive down its stock price.
Fairfax Financial Holdings was awarded a combined $10.96 million in damages for commercial disparagement and charges of conspiracy, according to court documents. The verdict — against defunct hedge fund firm Exis Capital Management, founder Adam Sender, and former chief operating officer Andrew Heller — is tied to a lawsuit that Fairfax and its New Jersey subsidiary Crum & Forster Holdings Corp filed more than a decade ago alleging that the insurer's stock was manipulated by hedge funds engaged in a short-selling scheme.
Battles between companies and short-sellers can be long and intense, with Elon Musk’s Tesla being a high-profile example playing out this year over social media. Fairfax — which in 2006 sued Exis along with Steve Cohen’s former hedge fund firm SAC Capital Advisors, Kynikos Associates, Third Point, and brokerage firm Morgan Keegan & Co. — isn’t done fighting yet.
“We will continue to pursue our appeals against SAC Capital and Exis to recover greater damages than were permitted by the court in this trial,” Michael Bowe, an attorney at Kasowitz Benson Torres who represents Fairfax, said in an emailed statement.
"The jury's verdict that Exis, Adam Sender, and Andrew Heller disparaged Fairfax and Crum & Forster and conspired with others to do so provides final vindication after many years,” he said. “The award of punitive damages against each defendant sends a message that such conduct will not be tolerated.”
Adam Sender, who is founder and chief investment officer at Sender Company & Partners, didn’t immediately return a phone call seeking comment about the jury’s verdict. Before founding Exis, Sender had worked at SAC as a portfolio manager and trader from 1996 to 1998, according to SC&P’s website. His former colleague at Exis, Heller, didn't immediately respond to request for comment sent over LinkedIn.
Toronto-based Fairfax announced last month that Morgan Keegan, now a unit of Raymond James Financial, agreed to pay $20 million to settle the suit.
In March, a judge in New Jersey dismissed Fairfax’s claims against Cohen and SAC on jurisdictional grounds, according to a document filed March 29 with the Superior Court of New Jersey in Morris County. The suit against hedge fund firms Kynikos Associates and Third Point had been earlier dismissed for jurisdictional reasons.