AAMC Files Lawsuit Against Former Board Member Nathaniel Redleaf for Improperly Disclosing Confidential Information for Financial Gain
31 Octobre 2022 - 9:33PM
Altisource Asset Management Corporation (“AAMC” or the “Company”)
(NYSE American: AAMC) today filed a complaint in the Superior Court
of the U.S. Virgin Islands, Division of St. Croix, against former
AAMC board member Nathaniel Redleaf, who improperly disclosed
confidential information of the firm to financially benefit himself
and his current employer, New York-based hedge fund Luxor Capital
Group (Luxor).
As outlined in the complaint, Redleaf
engaged in a secret scheme to illegally use AAMC’s confidential
information to benefit Luxor, a $12 billion hedge fund founded by
Christian Leone, a former Goldman Sachs analyst. Luxor acquired
19.7 percent of AAMC and then had its partner, Redleaf, join the
AAMC board as part of a plan to funnel confidential information
back to Leone and Luxor.
One aspect of the scheme involved Luxor’s $150
million investment into AAMC preferred stock. The proceeds of that
investment were used to buyback AAMC’s common stock, thereby
increasing the value of Luxor’s stake in AAMC’s common stock, which
at the time was valued at more than $350 million. The nonpublic
information that Redleaf was privy to as an AAMC board member was
illegally used by himself and Leone to make investment and trading
decisions.
Instead of adhering to the well-established
compliance practice of setting up an ethical wall to ensure that
material nonpublic information is not disclosed to a hedge fund
that employs a director of a public company, Redleaf improperly
disclosed the information to Luxor as noted in the complaint. Luxor
anticipated making hundreds of millions of dollars on the position
it built.
Redleaf’s actions harmed AAMC and its
shareholders. AAMC is seeking to recoup any of Luxor and Redleaf’s
ill-gotten gains through this litigation.
About AAMC
AAMC is an alternative lending company that
provides liquidity and capital to under-served markets. We also
continue to assess opportunities that could potentially be of
long-term benefit to shareholders such as Crypto-ATMs.
Additional information is available at
www.altisourceamc.com.
Forward-looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, regarding management’s beliefs, estimates,
projections, anticipations, and assumptions with respect to, among
other things, the Company’s financial results, margins, employee
costs, future operations, business plans, including its ability to
sell loans and obtain funding, and investment strategies as well as
industry and market conditions. These statements may be identified
by words such as “anticipate,” “intend,” “expect,” “may,” “could,”
“should,” “would,” “plan,” “estimate,” “target,” “seek,” “believe,”
and other expressions or words of similar meaning. We caution that
forward-looking statements are qualified by the existence of
certain risks and uncertainties that could cause actual results and
events to differ materially from what is contemplated by the
forward-looking statements. Factors that could cause our actual
results to differ materially from these forward-looking statements
may include, without limitation: our ability to develop our
businesses and to make them successful or sustain the performance
of any such businesses; our ability to purchase, originate, and
sell loans; our ability to obtain funding, market and industry
conditions, particularly with respect to industry margins for loan
products we may purchase, originate, or sell; our ability to hire
employees and the cost of hiring such employees; and other risks
and uncertainties detailed in the “Risk Factors” and other sections
described from time to time in the Company’s current and future
filings with the Securities and Exchange Commission. The foregoing
list of factors should not be construed as exhaustive.
The statements made in this press release are
current as of the date of this press release only. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements or any other information contained
herein, whether as a result of new information, future events, or
otherwise.
FOR FURTHER INFORMATION CONTACT:
Investor Relations
T: +1-704-275-9113
E: IR@AltisourceAMC.com
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