Hedge Funds Win Trial Accusing Them of Operating as a Group for Short Swing Profits

Hedge Funds Win Trial Accusing Them of Operating as a Group for Short Swing Profits by Matthew Russell Lee, Patreon Book Substack SDNY COURTHOUSE, June 18 – On the 24th floor of Federal court in Manhattan a trial concluded on June 18, in which hedge funds tried to show the jury they carefully avoiding group formation despite the appearance of implicit agreements / concerted action.    The case is Augenbaum v. Anson Investment Master Fund LP et al..     U.S. District Court for the Southern District of New York Judge Arun Subramanian, still presiding over the Live Nation antitrust case - and a related FOIA lawsuit - denied a motion to dismiss back in December.     On June 18 the defense argued, The trial record is devoid of evidence that could support Plaintiff’s claim against Empery. Investors do not form a Section 13(d) group by participating in a parallel transaction, yet that is all Plaintiff’s case in chief demonstrated as to Empery. Instead, a Section 13(d) group is formed for purposes of Section 16(b) where beneficial owners agree to act together to pursue a common objective with their investment power. Plaintiff has failed to meet his burden. After five days of trial and admitting more than ninety exhibits into evidence, Plaintiff did not adduce any proof that Empery agreed to act in concert with any other investor or pooled its holdings in furtherance of a common objective. In fact, the record establishes the opposite.  Later on June 18 Judge Subramanian had the closing arguments run back to back into the early afternoon. By 5 pm the verdict: no liability for the defendant hedge funds. They and their lawyers congratulated each other and then headed out, in the streets still full of detritus from the New York Knicks victory parade.  More on X for Subscribers here and Substack here  The case is In Augenbaum v. Anson Investment Master Fund LP et al., 1:22-cv-249 (Subramanian) *** Your support means a lot. As little as $5 a month helps keep us going and grants you access to exclusive bonus material on our Patreon page. Click here to become a patron. Feedback: Editorial [at] innercitypress.com Mail: Box 130222, Chinatown Station, NY NY 10013 Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.  Copyright 2006-2026 Inner City Press, Inc. To request reprint or other permission, e-contact Editorial [at] innercitypress.com