Greenlight Capital has gone to court in asking the website Seeking Alpha to divulge the identity of the person who revealed the company's stake in Micron before an official announcement was made, Reuters reported citing a court filing.
David Einhorn's hedge fund lodged the action on Thursday, February 13, before a state court in New York. Greenlight claimed that someone who goes by the pen name "Valuable Insights" frequently commented on the Seeking Alpha site and was the one who disclosed Einhorn's position in November last year. This resulted to an increase in the share price of chipmaker Micron, the report said.
The court filing said, "Because this was the very time frame in which Greenlight was in the process of building its Micron position, it was forced to pay higher prices for its Micron securities."
Greenlight, which posted returns of 19.5% in 2013, submitted a confidentiality letter which disclosed its position in the chipmaker to the US Securities and Exchange Commission a short while after the commenter revealed the information on Seeking Alpha.
The filing added, "Prior to the Internet postings, the only persons to whom Greenlight disclosed its position in Micron were persons subject to a contractual, fiduciary, or other duty to maintain the confidentiality of that information: Greenlight's employees, legal counsel, prime and executing brokers, fund administrator, and other agents."
Later in November, Greenlight eventually said its position in Micron was around 23.02 million shares, the report said.
According to a report on The Wall Street Journal about the matter, the filing said that Seeking Alpha did not wish to identify the name of the poster and that "Valuable Insights" also had Micron shares at that time. Rather a short biography on Seeking Alpha described the commenter as a "fund manager with more than 20 years of experience in the securities industry," WSJ reported.
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