DOJ Moves to Dismiss False Claims Lawsuits Driven By Stock Short Seller

  • Home >
  • Resources >
  • DOJ Moves to Dismiss False Claims Lawsuits Driven By Stock Short Seller
February 06, 2019

The U.S. Department of Justice (DOJ) has moved to dismiss two whistleblower False Claims Act lawsuits that were filed by a former hedge fund manager who shorted stock in the companies he sued, Legal Newsline reports in Forbes.

The lawsuits were filed by a Boston-based hedge fund manager who accused major pharmaceutical companies of a complicated price-fixing scheme. While he was filing the lawsuits, he also shorted the stock of the companies that were not only allegedly involved in the scheme, but were also in one of the funds he managed for his firm. He also tried to publicize the lawsuits by emailing news organizations and financial analysts.

In its motion to dismiss, the DOJ said the False Claims Act “is not intended to be used as a lever to further private financial dealings by a whistleblower.” The DOJ filed similar motions in 11 other lawsuits after learning they were filed by shell companies designed to bring lawsuits.

02/06/2019