CHRISTIANSTED, US Virgin Islands, Oct. 31, 2022 (GLOBE NEWSWIRE) — Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE American: AAMC) today filed a complaint in the Superior Court of the US Virgin Islands , Division of St. Croix against former AAMC board member Nathaniel Redleaf, who improperly disclosed company confidential information to financially benefit himself and his current employer, New York-based hedge fund Luxor Capital Group (Luxor).
As set out in the complaint, Redleaf participated in a secret scheme to illegally use confidential information from AAMC to benefit Luxor, a $12 billion hedge fund managed by Christian Leone, a former Goldman Sachs analyst. Founded. Luxor acquired 19.7 percent of AAMC and then brought its partner Redleaf to the AAMC board as part of a plan to funnel confidential information back to Leone and Luxor.
One aspect of the program involved Luxor’s $150 million investment in AAMC preferred stock. Proceeds from this investment were used to repurchase AAMC common stock, increasing the value of Luxor’s interest in AAMC common stock, which was then valued at more than $350 million. The non-public information that Redleaf was privy to as an AAMC board member was illegally used by him and Leone to make investment and trading decisions.
Instead of adhering to established compliance practice of erecting an ethical wall to ensure material non-public information is not disclosed to a hedge fund that employs a public company director, Redleaf unlawfully disclosed the information to Luxor, as per the complaint stated. Luxor expected to make hundreds of millions of dollars from the position it built.
Redleaf’s actions have harmed AAMC and its shareholders. AAMC seeks to recover all of Luxor’s and Redleaf’s ill-gotten gains from this litigation.
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