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Fairfax Financial Claims in Suit That Third Point's Loeb Lied to Investors!


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Bloomberg article that discusses Fairfax's claims against Third Point, including that Daniel Loeb did not know what finite reinsurance was in his deposition! 

 

http://www.bloomberg.com/news/2011-03-05/fairfax-financial-claims-in-suit-that-third-point-s-loeb-lied-to-investors.html

 

How could he not know?  Everyone on the old MSN BRK Message Board knew what finite reinsurance was after the whole naked-short attack, yet this guy who runs $5.6B and was shorting Fairfax after EXTENSIVE research didn't know what it was?  Cheers!

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Like many here I have been following this since day one. Some of the events that have come to light surrounding this case are so unbelievable, so over the top, that if these events were contained in a work of fiction it would have been regarded as completely unrealistic. Seems there is just one preposterous thing after another. Who were these people? How could people in responsible positions get away with so much for so long? This is going to make a very interesting book some day. From manipulation of the markets to the cloak and dagger stuff and the outrageous, unfounded claims made against Prem and Fairfax it is difficult to believe that it has taken so long for the truth to come out. Stay tuned.

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I agree!  If the courts eventually decide in favor of Fairfax, I think this will be the biggest scandal since Madoff.  And the bigger question, how can the average investor, or even CEO, not assume that the game is rigged against them.  Cheers!

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At some point wouldn't this make a great subject for Fifth Estate, W5, 60 Minutes, Dateline, etc unless it becomes too complicated for them, but it has a great story line with all the intrigue of any novel.

 

In fact there is more in this than in a lot of movies like Wall Street, etc. So for a movie, anyone want to suggest who we would cast as Prem, etc? I think that there are so many villains here we could employ half the bad guys in Hollywood. And I think we could even find a place for Charlie Sheen.

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Hmmm..  Maybe this is the only way to 'regulate'..  The companies that are attacked and survive have to sue and fight back.  I say this after having read that recent rollingstone article about the unbelievably cozy relationship between the SEC and the investment banks (presumably also the Hedge funds)..  I guess the SEC would rather go after big criminals like Martha Stewart than after bankers..

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At some point wouldn't this make a great subject for Fifth Estate, W5, 60 Minutes, Dateline, etc unless it becomes too complicated for them, but it has a great story line with all the intrigue of any novel.

 

In fact there is more in this than in a lot of movies like Wall Street, etc. So for a movie, anyone want to suggest who we would cast as Prem, etc? I think that there are so many villains here we could employ half the bad guys in Hollywood. And I think we could even find a place for Charlie Sheen.

 

Well, Prem would obviously be played by Ben Kingsley!  ;D  I think the cast of Seinfeld could play some of the other players...Michael Richards (Kramer) would be Herb Greenberg...Peter Eavis could be played by Jason Alexander (George from Seinfeld) and Wayne Knight (Newman) could play Steve Cohen!  Cheers! 

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Michael Richards (Kramer) would be Herb Greenberg...Peter Eavis could be played by Jason Alexander (George from Seinfeld) and Wayne Knight (Newman) could play Steve Cohen!  Cheers! 

 

Like 'em all, especially Wayne Knight. Who plays Spyro Contogouris?

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Do you have links to posts from that past to get up to speed on that story? Specially I would like to know the roles of Hempton, Loeb, Cohen and Einhorn. I also wonder about B. McLean role: loved her book on Enron but I wonder if she is too close to some of the hedgies.

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Like 'em all, especially Wayne Knight. Who plays Spyro Contogouris?

 

How about Charlie Sheen?  Since Spyro is apparently "winning", like Charlie Sheen.  And of course, Peter Eavis and Fabrice Taylor can both be played by blocks of clay, since they are so moldable and terrific at reinventing themselves after huge lapses in judgement.  Cheers!

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"Do you have links to posts from that past to get up to speed on that story? Specially I would like to know the roles of Hempton, Loeb, Cohen and Einhorn. I also wonder about B. McLean role: loved her book on Enron but I wonder if she is too close to some of the hedgies."

 

Try the "Deep Capture" web site for some of the background information. As far as Ms McLean is concerned I believe she lost all credibility in this matter.

 

 

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Try the "Deep Capture" web site for some of the background information. As far as Ms McLean is concerned I believe she lost all credibility in this matter.

 

I did, but I would prefer to read what you guys thought at that time. Deep Capture can be nutty sometimes.

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Plan,

 

A few of my imperfect recollections---hope to give you a slight taste of the hedgie attack era.  lots of members here can correct and add to this.  I highly suggest you read the lawsuit.

 

Before Fairfax launched the lawsuit against the hedgies:

-Some board members here noticed that certain FFH options very getting very cheap (the hedgies were using options to create a synthetic short.

-The hedgies developed or paid for a website that attacked the character of Watsa.

-People in the know started discussing naked shorting, here on this board, and elsewhere on the net.

-If I recall correctly, there were times when shares short were greater than twice the entire float.  (and remember that a lot of the float was held by investors that were long Fairfax).

-We discussed on this board how to prevent having our shares lent without your permission:  hold your Fairfax shares on TSX, and use cash account instead of margin account or consider taking physical delivery. (TSX has better forced buy in for "failed to deliver" to prevent naked shorting).

-There was a lot of discussion about stock settlement mechanisms and how badly they were broken in the US.  People that complain about Prem pulling the US listing have to remember just how much of this manipulation occurred on NYSE which would not have been possible on the TSX because of improved buy in procedures.

 

You might enjoy reading the Fairfax lawsuit against these parties. I think it was published on Fairfax's website as PDF when their lawsuit was launched against the hedgies. When I read that lawsuit, it confirmed a lot of things that we had speculated about in terms of how deep the hedge manipulation and collusion between related hedgies and journalist went.  It confirmed a lot of the "nutty" stuff we read about on Deep Capture but was described more rationally.

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Also, there were a number of anonymous posters who were showing up on the old MSN BRK Board and other message boards, and stating things about Fairfax which almost immediately showed up in articles by Peter Eavis, Fabrice Taylor, Herb Greenberg and other writers.  We were one of the first people to warn Fairfax that something very nefarious was going on, and that somebody was coordinating an attack against its stock.  

 

From what we eventually traced, it was John Hempton, an analyst at Platinum Asset Management in Australia who was behind the posts.  He was also the one feeding information to John Gwynn, the analyst at Morgan Keegan who wrote several very negative reports about Fairfax, and subsequently had fed these reports to people working closely to Jim Chanos and Daniel Loeb, ahead of Morgan Keegan publishing them publically.  Gwynn was subsequently fired for that.  

 

Hempton also was the one feeding information to former Street.com writer Peter Eavis, who wrote some 50+ articles about Fairfax in a 6-month period.  Peter Eavis once openly posted on the Stockhouse.com FFH Board that he would like to speak to anyone who works for Fairfax or worked for the company in the past.  Hempton also contacted a number of other Fairfax shareholders, telling them they should sell because Fairfax was using finite reinsurance to bolster its balance sheet.  Hempton was subsequently let go from Platinum as well.  Gwynn mysteriously passed away before the courts could depose him!  In my opinion, Deepcapture may go over the top at times in their prose, but they have been more accurate than anyone else.  Cheers!      

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The thing I'm most proud of, is that during the heat of the battle, it would have been very easy for many of us to sell our Fairfax shares.  But I believe virtually everyone I knew during the old MSN BRK Board days, when all of this was happening, held on to their shares.  On top of that, as James said, we were shooting down one argument after another. 

 

Perhaps, that's why Prem supports all of the shareholders that stuck by him so much.  As that Jewish friend of Buffett's stated after living through the Holocaust...how many people do you know that would hide you from the Nazi's?  I think Prem realized that all of his staff would, many of his long-time friends, and the many Fairfax shareholders on our board.  Cheers!

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The thing I'm most proud of, is that during the heat of the battle, it would have been very easy for many of us to sell our Fairfax shares.  But I believe virtually everyone I knew during the old MSN BRK Board days, when all of this was happening, held on to their shares.  On top of that, as James said, we were shooting down one argument after another. 

 

Perhaps, that's why Prem supports all of the shareholders that stuck by him so much.  As that Jewish friend of Buffett's stated after living through the Holocaust...how many people do you know that would hide you from the Nazi's?  I think Prem realized that all of his staff would, many of his long-time friends, and the many Fairfax shareholders on our board.  Cheers!

 

Well said. It required gut tightening as I watched the stock get pummelled to, I think $50 or so intraday. Forget the date but it is vivid in my memory. All you had to do is to check the Yahoo msg board in the days around that date, the reports written by Herb G, Bethany M et al, the manipulation was as clear as sunlight. And then the day after the lawsuit, everything went radio silent. Hmmm..

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The thing I'm most proud of, is that during the heat of the battle, it would have been very easy for many of us to sell our Fairfax shares.  But I believe virtually everyone I knew during the old MSN BRK Board days, when all of this was happening, held on to their shares.  On top of that, as James said, we were shooting down one argument after another. 

 

Perhaps, that's why Prem supports all of the shareholders that stuck by him so much.  As that Jewish friend of Buffett's stated after living through the Holocaust...how many people do you know that would hide you from the Nazi's?  I think Prem realized that all of his staff would, many of his long-time friends, and the many Fairfax shareholders on our board.  Cheers!

 

 

Held on to our shares?  I was accumulating during that period and lamented that I had gone out for lunch on the day in 2003 that FFH hit CDN$57.  When I got back from lunch and figured out that the world hadn't ended, I managed scrape up the cash to buy 40 or 50 shares at ~CDN$70.  Too bad that I didn't have an extra $25,000 laying around!

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Held on to our shares?  I was accumulating during that period and lamented that I had gone out for lunch on the day in 2003 that FFH hit CDN$57.  When I got back from lunch and figured out that the world hadn't ended, I managed scrape up the cash to buy 40 or 50 shares at ~CDN$70.  Too bad that I didn't have an extra $25,000 laying around!

 

I have it in my records somewhere - I recall buying 50 shares at around 78 cdn the same day.  I think that was Feb. 2004 after the NYSE listing.  I didn't find this board until the following fall.  It all began to make sense when I started to follow this Message Board, bsilly and crip.

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  It all began to make sense when I started to follow this Message Board, bsilly and crip.

 

bsilly and crip? I'm very curious to know more about these people or sites that you are comparing in usefulness to this board. Care to elaborate?

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  It all began to make sense when I started to follow this Message Board, bsilly and crip.

 

bsilly and crip? I'm very curious to know more about these people or sites that you are comparing in usefulness to this board. Care to elaborate?

 

bsilly and crip were members of the first incarnation of this message board.

 

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I can talk about Crip since I've "known" him and interacted with him since several years on this message board and other message boards as well.

 

He's not only a focused long term fundamental value investor, but also a down to earth person. As far as I know, he has a rare combination of being neither a follow the crowd or being a contrarian person. He mostly stick to hiw own beliefs.

 

In my book, he's the perfect shareholder, since he's long term oriented, focused and very patient, while being able to keep a critical view.

 

He does not post as often as some of us here, but I really appreciate his contributions. We should have more Crip and less "Wall Streeters" in this world.

 

Cheers! 

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