Michael Lewis, who wrote the best-seller “The Big Short: Inside the Doomsday Machine” about the mortgage meltdown, has become the target of a lawsuit by an asset manager he wrote about in the book. Lewis, his publisher, W. W. Norton & Co., and hedge fund manager Steven Eisman of FrontPoint Partners LLC in Connecticut were all named in the suit, filed in Manhattan federal court on Friday.
According to a Reuters report, Wing Chau and his firm Harding Advisory LLC allege in the suit, which was made public on Monday, that Lewis’ book made “false and defamatory statements” about Chau and his firm “and [that they] want to redress that wrong.”
The suit said in part, "In sharing the purported insider's view of the mortgage market meltdown, Lewis made false and defamatory statements about an experienced investment professional, Wing Chau, and his firm, Harding Advisory LLC." It also said that while Chau and other managers who used collateralized debt obligations (CDOs) were portrayed as “villains,” Eisman was depicted as “heroic.” The suit seeks unspecified damages from all parties, as well as punitive damages.
Drake McFeely, president and chairman of the publisher, said in the report, "Suits like this one are an unfortunate fact of life in our industry, particularly when a book is as successful as this one has been." He went on to say, "We stand by Mr. Lewis and his book The Big Short, and, assuming that Mr. Chau's suit has been filed, we expect that it will be dismissed."
Both the publisher and Lewis said the complaint had not yet been served upon them. Eisman said he had no notice of such a suit and had no comment. The book was published in March of 2010 and was No. 1 on The New York Times list of hardcover nonfiction bestsellers for six weeks.