Saturday, June 07, 2008

Solengo Capital wants to keep Solengo prospectus secret

Harvard's Citizen Media Law Project reports:

Solengo Capital Advisors v.
Posted June 6th, 2008 by David Ardia
Threat type: LawsuitDate: 03/30/2007
Subject Area(s): Copyright
PartiesParty Issuing Threat:
Solengo Capital Advisors ULC
Party Receiving Threat:
Dealbreaker, Elizabeth Spiers, John Carney, Bess Levin, John Doe and Jane DoeType of Threatening Party:

Description:, a website that describes itself as "an online business tabloid and Wall Street gossip site," was sued for copyright infringement by Solengo Capital, a hedge fund founded by former Amaranth Advisors traders, over Dealbreaker's posting of Solengo's prospectus, which contained information about the firm's planned structure, trading and risk management platforms, and biographies of its founders.

In response to Solengo's initial threat to file a lawsuit on March 28, 2007, editors at Dealbreaker said the materials were of legitimate news value and refused to remove them, telling Reuters:

"We think it's valuable to our readers and the public to be able to see the information in it," said John Carney, DealBreaker editor, in an interview on Friday.

The legal dust-up is the latest stemming from the abrupt implosion of $9.3 billion hedge fund Amaranth last year, which shocked investors and raised awareness of hedge fund risk. The recent founding of Solengo by some of the energy traders blamed for the $6 billion in losses that caused the Amaranth collapse has also generated controversy.

Carney, a former corporate lawyer, said his site plans to contest any legal challenge. "We're willing to take it as far as it merits. I don't expect to defy a court order or go to jail for it, however."
On March 30, 2007, Solengo sought a preliminary injunction ordering Dealbreaker to remove the prospectus from its website. After the court denied the injunction request, Solengo filed a complaint alleging copyright infringement against the website and several of its editors.

On April 2, 2007, the court issued a preliminary injunction on consent of the parties, requiring Dealbreaker to remove the prospectus pending the outcome of the litigation. On May 24, 2007, Dealbreaker filed a motion to dismiss, arguing that Solengo had failed to register its copyright in the prospectus prior to filing suit.

In August 2007, the parties reached a settlement, and the prospectus appears to have been permanently removed from the Dealbreaker site.

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