Globe and Mail – Fairfax Financial Holdings Ltd. is claiming a victory in a long-running legal battle with U.S. hedge funds after brokerage firm Morgan Keegan & Co. Inc. revealed on Wednesday it has fired an analyst embroiled in a dispute with Fairfax. <\/p>\n
Morgan Keegan confirmed it fired analyst John Gwynn last month for giving a report on Fairfax to some clients before it was published.<\/p>\n
Fairfax has sued Morgan Keegan, based in Memphis, Tenn., and a group of U.S. hedge funds, alleging they worked together to damage Fairfax’s reputation and drive down its share price. Fairfax called it a “massive, illegal and continuing scheme that has targeted and severely harmed Fairfax.” <\/p>\n
One of Fairfax’s claims in the suit is an allegation that Mr. Gwynn told hedge funds about negative reports before he issued them publicly, allowing hedge funds to short-sell Fairfax’s stock and profit after the news was released. <\/p>\n
Toronto-based Fairfax has particularly pointed to Mr. Gwynn’s first report on the company, published Jan. 16, 2003, which said the company had a shortfall in its reserves. The company’s share price fell 28 per cent in the three days after the report was published.<\/p>\n