The Hedge Fund Law Report

The definitive source of actionable intelligence on hedge fund law and regulation

Articles By Topic

By Topic: Freedom of Speech

  • From Vol. 5 No.30 (Aug. 2, 2012)

    How Far Can Hedge Fund Managers Go in Criticizing Public Companies?

    Hedge fund managers that make public comments about companies can face legal and regulatory risks.  Depending on the nature and scope of comments, regulators may determine that public comments by hedge fund managers may constitute market manipulation, which is prohibited by Section 9 of the Securities Act of 1933.  In addition, the public companies discussed by hedge fund managers may file defamation lawsuits against such managers.  This article discusses a recent court decision on the scope of permissible public statements by hedge fund managers about public companies.  This article is particularly relevant to hedge fund managers whose funds hold short positions in public equity.

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  • From Vol. 4 No.35 (Oct. 6, 2011)

    How Much Information Can a Hedge Fund Manager Include On a Public Website?

    On September 22, 2011, the Massachusetts Supreme Court issued an important decision dealing with how much information hedge fund managers may include on their public websites.  The answer seeks to balance the right on the part of individuals and entities to free speech with the right on the part of government to limit commercial speech.  The decision is important to hedge fund managers because the Internet is becoming a more central channel of hedge fund marketing.  Conveying the right amount of information in the right way can enhance marketing, but saying too much or saying it in the wrong way can lead to liability.  This decision helps establish parameters.  Our article provides an extensive analysis of the decision, the factual background and prior relevant decisions.

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  • From Vol. 2 No.41 (Oct. 15, 2009)

    Massachusetts’ Lawsuit Against Hedge Fund Manager Bulldog Investors and Its Principal, Phillip Goldstein, Survives Free Speech Challenge

    On September 30, 2009, the Massachusetts Superior Court ruled that an administrative action by Massachusetts securities regulators against activist hedge fund manager Bulldog Investors, its principal Phillip Goldstein and its affiliated funds, for selling unregistered securities over an Internet website, did not violate the defendants’ First Amendment rights.  The court found that the regulations challenged by the defendants as an unconstitutional abridgement of their right to freedom of speech fulfilled the criteria for testing such a First Amendment challenge as set forth by the United States Supreme Court in Central Hudson Gas & Electric Corp. v. Public Serv. Comm’n, 447 U.S. 557, 561 (1980).  As required by that decision, the court found that the regulations advanced the state’s interest in protecting the capital markets and did not intrude on speech any more than necessary to achieve that objective.  This article summarizes the background of the action and details the court’s legal analysis.

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