Philadelphia Inquirer – A Boston hedge fund participated in an illegal scheme to drive down the share price of American Business Financial Services Inc., according to the bankruptcy trustee who is liquidating the former Philadelphia mortgage lender.
Boston Partners Asset Management L.L.C. sent anonymous letters and posted Internet comments in a “vicious pattern of conduct” to damage ABFS, Trustee George L. Miller alleged in a civil lawsuit filed Dec. 30 in federal court in Wilmington.
Cynthia Perl, a spokeswoman for Boston Partners’ parent, Robeco Investment Management Inc., would not comment on the lawsuit.
The suit seeks unspecified compensatory and punitive damages, plus the profits that Boston Partners earned in short sales of ABFS stock. In a short sale, investors borrow shares and then sell them, hoping to replace them later at a lower price.
Miller’s lawsuit alleges that Boston Partners made illegal “naked” short sales, in which nonexistent shares are sold to put pressure on the share price, even though the transaction ultimately falls through.
