Einhorn Wants Name of Blabbing Blogger to Bring Lawsuit

March 19, 2014 PJ Moore In the News

David Einhorn, vocal head of Greenlight Capital, wants to know who leaked the name of one of his firm’s investments last year in a blog post published on the financial website “Seeking Alpha.”

Mr. Einhorn is angry that an anonymous blogger revealed that Micron Technology was one of his investments, and he wants to go to court to find out who was behind the revelation.

Greenlight has already filed a legal motion which is attracting attention from various quarters around Wall Street demanding that Seeking Alpha own up to the identity of the blogger. With the name in hand, the firm said in its legal brief, it “can sue the pseudonymous poster under his or her real name.”

New York Supreme Court Judge Carol R. Edmead originally ordered Seeking Alpha representatives to appear in court this past Tuesday to explain to the court why she should not agree to Greenlight’s motion, but the hearing was delayed until April 1st.

The case has great significance for what types of financial information can be reported using anonymous sources. Of even greater importance is how courts will deal with the ever more prevalent trend of confidential information being posted on social media sites and comments in established news websites.

Leaks to the media on Wall Street are not unusual; it is even an accepted tradition. It is quite rare for firms to legally seek out the leakers, or the media outlets where the information was published. It is not clear that any kind of criminal violation took place by leaking confidential information. Yet, it could be a civil violation if the leaker transgressed a fiduciary duty or a particular agreement to maintain the privacy of certain information.

Mr. Einhorn’s brief stated that, “the only persons who lawfully possessed information regarding Greenlight’s position in Micron were persons with a contractual, fiduciary or other duty to maintain the confidentiality of Greenlight’s position: Greenlight’s employees, counsel, prime and executing brokers and other agents.”

Many people could have had access to Greenlight’s stake in Micron, including his employees, his outside lawyers, and army of bankers and traders who helped him build the investment position. Any of them could have either written the blog post or leaked the information to the blogger.

David Einhorn, Greenlight Capital, Judge Carol R. Edmead, Seeking Alpha,

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