Case Page

 

Case Status:    DISMISSED    
On or around 03/31/2011 (Court's order of dismissal)

Filing Date: June 30, 2008

According to the complaint, filed on June 30, 2008, this case concerns an international fraudulent securities scheme based on the illicit purchases of hundreds of millions of dollars of securities in illiquid U.S. penny stocks in the names of multiple Absolute Capital hedge funds. When the truth about these purchases was revealed in September 2007, the value of the hedge funds promptly plunged by up to 40%, or by hundreds of millions of dollars in the aggregate.

In September 2007, the Chief Investment Officer of Return Europe Fund, East West Fund, European Catalyst Fund, Octane Fund, Activist Fund and other funds within the Absolute Capital family of funds suddenly disappeared. Similarly, the Chairman and CEO suddenly resigned. As reported in the press, "many Absolute investors found themselves looking at big losses after it emerged in the days after the CIO’s disappearance that a substantial amount of his holdings had been in bulletin board, or 'pink' sheet stocks."
Stocks known as "bulletin board" stocks or "pink sheet" stocks are stocks in companies that cannot meet the requirements to be listed on a national securities exchange. Such stocks are universally recognized in the securities industry to be illiquid, thinly-traded, and speculative. They are often stocks in start-up companies. Such stocks are far more susceptible to market manipulation than stocks traded on a national exchange.

The "big losses" initially reported in the press were an understatement. In a September 19, 2007 press release by ACM, ACM revealed that the Absolute Capital Funds' investments in illiquid "US-based Over the Counter Bulletin Board/Pink Sheet" stocks were "approximately $440 million to $530 million of the equity funds' assets."

The sudden revelation that the missing CIO had invested roughly half a billion dollars in illiquid penny stocks, contrary to the provisions contained in the Funds' offering memoranda, caused the value of investments in the Absolute Capital Funds to plunge and to put ACM in a financial crisis.

On October 10, 2008, Cascade Fund LLLP was appointed lead plaintiff and the law firms of Sander, Ingebretsen & Parish, P.C. and Kohn, Swift, & Graf, P.C. were appointed as co-lead counsel. On October 21, 2008, the defendants filed a motion to dismiss for lack of jurisdiction. Before any order on that motion, the lead plaintiff filed a First Amended Complaint. The defendants responded by filing an amended motion to dismiss for lack of jurisdiction. On September 16, 2009, defendant Argo Group Limited filed a motion to dismiss the First Amended Complaint.

On March 31, 2011, the Court dismissed the claims against the defendants, however, stayed the effect of the order for 30 days for the plaintiff to file an amended pleading. On June 7, 2011, the plaintiffs filed a notice of voluntary dismissal, dismissing all claims.

COMPANY INFORMATION:

Sector: Financial
Industry: Investment Services
Headquarters: Cayman Islands

SECURITIES INFORMATION:

Ticker Symbol: AMGHF
Company Market: Pink Sheets
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Colorado
DOCKET #: 08-CV-01381
JUDGE: Hon. Marcia S. Krieger
DATE FILED: 06/30/2008
CLASS PERIOD START: 06/30/2005
CLASS PERIOD END: 06/30/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kohn, Swift & Graf, P.C.
    One South Broad Street - Suite 2100, Kohn, Swift & Graf, P.C. , PA 19107
    215.238.1700 215.238.1960 · info@kohnswift.com
  2. Sander Ingebretsen & Parish, P.C.
    633 17th Street, Suite 1900, Sander Ingebretsen & Parish, P.C., CO 80202
    303.285.5544 303.285.5544 · inquiry@siplaw.com
No Document Title Filing Date
COURT: D. Colorado
DOCKET #: 08-CV-01381
JUDGE: Hon. Marcia S. Krieger
DATE FILED: 02/25/2009
CLASS PERIOD START: 06/30/2005
CLASS PERIOD END: 09/18/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kohn, Swift & Graf, P.C.
    One South Broad Street - Suite 2100, Kohn, Swift & Graf, P.C. , PA 19107
    215.238.1700 215.238.1960 · info@kohnswift.com
  2. Sander Ingebretsen & Wake, P.C.
    1660 17th Street, Suite 450, Sander Ingebretsen & Wake, P.C., CO 80202
    303.285.5300 303.285.5300 · inquiry@siwlegal.com
No Document Title Filing Date