Hong Kong-based hedge fund Oasis Management is suing Morgan Stanley for $9.3 million over options bought in Sino-Forest, Bloomberg reports.
Here's what Oasis claims. [via Bloomberg]
Morgan Stanley failed to settle the options contracts in an effort to “limit its liability,” Oasis said in a lawsuit filed in London in July.
What supposedly happened was Oasis bought options to sell Sino-Forest for C$19 on May 12.
Then about three weeks later, Sino-Forest's stock price plummeted after short seller Carson Block's research firm Muddy Waters said in a report that Sino-Forest had overstated its timberland holdings. Shares of the Hong Kong- and Mississauga, Ontario-based timberland company have dived 74% since June 1 -- the day before the report was released.
In order to settle the suit, Morgan Stanley would have to pay Oasis C$7.5 million, Bloomberg reports, citing the hedge fund's court filing.
The filing also said that the put options are valued at C$9.5 million compared with C$2 million for the equivalent shares, the report said. Back in May, Oasis claimed it paid Morgan Stanley a premium of C$770,000 for the options.
Oasis also alleges that Morgan Stanley claimed that the options were terminated because trading in Sino-Forest's shares was suspended.
Canadian regulators halted trading in shares of Sino-Forest on August 26, saying the Hong Kong- and Mississauga, Ontario-based timberland company may have engaged in fraud.
Oasis also said Morgan Stanley offered C$3.8 million to cancel the deal.
View the original article here
This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.
No comments:
Post a Comment