Viking Global Equities LP, a hedge fund sponsor based in New York, recently filed suit against Porsche Automobile Holdings SE, the German luxury automaker, in the U.S. District Court for the Southern District of New York. The case alleges, in part, that Porsche SE took affirmative steps to corner the market of Volkswagen AG stock in an effort to secretly gain control of Volkswagen AG. Viking Global’s complaint alleges that Porsche SE fraudulently convinced investors that Volkswagen AG’s shares were overvalued which, in turn, induced short sales of the company’s stock further facilitating Porsche’s alleged scheme to takeover Volkswagen. Viking Global’s pleadings allege generally that Porsche SE manipulated the financial markets and made false statements to investors to further this fraud. Due to Porsche’s alleged activity, Viking Global claims to have lost at least $390 million in just two days.
This lawsuit is the most recent in a line of U.S. lawsuits triggered by the same or similar Porsche SE activity alleged in Viking Global’s complaint. The cases previously filed against Porsche SE were also brought on behalf of investors and investment groups and remain ongoing. In the early stages of these similar lawsuits, Porsche SE moved to dismiss the cases based on technical legal defenses, such as lack of personal jurisdiction and forum non conveniens (i.e., improper venue). Because Porsche SE has not yet responded to Viking Global’s complaint, it is too early to determine Porsche SE’s defense strategies in this most recent suit.