GlobeOp suspends shares after receiving $465 million lawsuit
04 July 2007 | 7292 views | 0
Hedge fund administration firm GlobeOp Financial Services has suspended conditional trading in its shares after being hit with a $415 million damages claim by a former client.
Archeus Capital Management filed suit in a New York court late Monday, contending GlobeOp was responsible for its collapse last year.
Archeus blamed GlobeOp for "colossal failures" in reconciling billions of dollars in trades in the Animi funds that are managed by Archeus. The firm alleges delays in filing statements with investors led to a flight out of the fund and pushed the Animi Funds into a "death spiral" from which they could not recover.
In a statement filed with the Stock Exchange early this morning, GlobeOp counters: "The overwhelming portion of Archeus' claim for $465 million is for consequential damages. GlobeOp's contract with Archeus expressly excludes claims for consequential damages and, in particular, for damages relating to loss of business or lost profits."
The firm says it intends to hit back with its own counter-claims against Archeus.
The filing of the claim comes immediately ahead of a planned £52 million flotation on the London Stock Exchange by GlobeOp.