Remember Paulson & Co's investment in Sino-Forest? One of the less than stellar trades that helped contribute to 2011 being an annus fucking horribilis for the hedge fund? Got a former investor named Hugh F. Culverhouse all riled up, shouting about "gross negligence" and "failure to properly monitor" the situation and making claims that it was clear no one at P&C bothered to perform any due diligence on the company, because if they did, "the Paulson companies could...have foreseen Sino-Forest's problems?" Things actually worked out for JP&Co on this one.
A federal judge in Miami threw out a lawsuit that accused Paulson & Co. of shoddy due diligence on Chinese forestry company Sino-Forest Corp., which saw its share price tumble after being attacked by a short seller...The plaintiff in the suit, Hugh F. Culverhouse, is a former federal prosecutor and Miami-based investor whose family once owned the Tampa Bay Buccaneers football team. Mr. Culverhouse alleged that Paulson & Co. "acted in a grossly negligent manner," including by failing to comply with the firm's "own rules and standards of conduct and supervision," according to the suit. In a motion to dismiss the suit, Paulson & Co. said Mr. Culverhouse had no legal standing to sue because he was an investor in a Paulson hedge fund through a Citigroup feeder fund. The docket note said the judge granted the motion by the hedge-fund firm to dismiss the case "on grounds that Plaintiff lacks standing to bring the instant litigation and claim a fiduciary relationship with Defendants."
Paulson Wins Court Dismissal of Lawsuit [WSJ]