David Einhorn, the hedge fund manager, dropped a controversial lawsuit aimed at unmasking an anonymous blogger on the Seeking Alpha financial website, who had discussed one of his hedge fund’s stock positions before it was publicly announced.
Mr. Einhorn’s Greenlight Capital moved to discontinue the civil lawsuit at the same time it issued a statement in which it said the hedge fund had identified the blogger. In the statement, which did not name the blogger, Greenlight said it “has resolved the matter privately to our satisfaction.â€
Jonathan Gasthalter, a spokesman for Mr. Einhorn, declined to comment beyond the statement.
It’s not clear how Greenlight managed to unmask the identity of Valuable Insights or what it intends to do next.
Colin Lokey, director of contributor success for Seeking Alpha, in a statement, said the website did not provide Greenlight with the identity of the blogger. He said the website remains committed to protecting the rights of its posters to remain anonymous if they desire.
“Greenlight dropped the suit of its own accord,†said Mr. Lokey. “We did not at any time disclose the author’s identity formally or informally, and at no time were our actions dictated by reaching a deal with Greenlight.â€
David Korzenik, a lawyer for Seeking Alpha, did not immediately respond to a request for comment.
A New York state court judge had scheduled a hearing for April 1 on Greenlight’s motion to force Seeking Alpha to divulge the name of the blogger, known only as Valuable Insights. In February, Greenlight filed the lawsuit claiming that a Nov. 14 post by Valuable Insights on the financial website had interfered with the hedge fund’s strategy of buying shares of Micron Technology. In the lawsuit, the hedge fund argued that only a few people could have known that Greenlight was amassing a big stock position in Micron and that the fund wanted Seeking Alpha to divulge the name of the blogger so it could learn who had leaked the confidential information.
The lawsuit stirred controversy on Wall Street with some saying it was infringement on a bloggers right to free speech, while others saying Mr. Einhorn was protecting his right to keep his trading strategies secret.
Greenlight had wanted to keep the investment in Micron confidential until at least Nov. 21, when Mr. Einhorn publicly discussed it at a charitable event, where prominent money managers were invited to present their “best investment ideas.†To do that, the hedge fund filed a request for confidential treatment with the U.S. Securities and Exchange Commission, a move that enabled the $10 billion fund to delay disclosing the stock position in a regulatory filing.
In the November blog post, Valuable Insights hinted that a large hedge fund manager would soon to be disclosing a large stock position in Micron. In response to a reader comment wondering whether the manager was Mr. Einhorn, the blogger confirmed the reader’s guess.
Mr. Einhorn had wanted to keep his position in Micron quiet until he unveiled it as one of his “best ideas†at a charity event.
