NEW YORK (HedgeWorld.com)–The lawyers sued by investors for losses in Wood River Capital Management hedge funds say they will vigorously defend against the case, which they describe as being without merit.
The law firm, Seward & Kissel LLP, said in a statement that when it learned about a problem in the funds last year, it informed the Securities and Exchange Commission so action could be taken to assist Wood River investors, and it resigned as counsel.
Seward & Kissel did not have information about the hedge fund portfolios that was unavailable to investors, the statement says. Moreover, the law firm questions whether most of the plaintiffs were really investors in Wood River.
“To our knowledge, none of them ever spoke with, contacted or relied on Seward & Kissel,” the firm said in the statement.
Some of the plaintiffs bought interests in Wood River funds from BNP Paribas, the bank. Reed Smith LLC, the law firm representing the plaintiffs, says other institutional investors may join the suit.
Seward & Kissel prepared the funds’ offering memoranda. It is accused of knowing, or being reckless in not knowing, that the offering documents contained wrong information and the diversification provision was violated by the manager. It says that it expects the complaint to be dismissed.
Investors also are suing Wood River’s administrator and alleged auditor. As with the matter of investors possibly not being investors, whether the auditor was really the auditor is in dispute.
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