2nd Circuit panel assesses $2 billion suit against Porsche

Hedge funds accuse automaker of cornering the market on Volkswagen stock as prelude to a takeover

The vitriol is revving up in New York, as a 2nd Circuit panel had an 80-minute hearing last Friday over whether Porsche Automobile Holdings SE illegally bought nearly all available shares of fellow automaker Volkswagen AG in 2008.

At issue is whether a U.S. Supreme Court ruling that limits securities fraud lawsuits should preclude the $2 billion lawsuit 32 hedge funds brought against Porsche. The German automaker won dismissal of the lawsuit in December 2010 when a trial judge cited the Supreme Court decision in Morrison v. National Bank of Australia Bank Ltd, which made it more difficult for investors to pursue securities claims over alleged wrongful overseas conduct in the U.S.

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