Silvercorp Metals Inc., a Canadian miner of silver in China, won dismissal of a counterclaim by a hedge fund that wrote a report posted on a website the company accused of spreading false information.
New York State Supreme Court Judge Carol R. Edmead today rejected Anthion Management LLC’s claim that it was entitled to damages under state laws designed to protect citizens who publicly challenge applications by businesses for permits, leases and licenses.
Anthion, based in New York, argued that Vancouver-based Silvercorp sued the website, Chinastockwatch.com, as part of a campaign to “retaliate against, intimidate and deter” criticism of the company.
“Anthion does not seek to expose fraud or wrongdoing for the public good, and did not publish its attacks on Silvercorp until after it established a short position in Silvercorp’s stock,” Edmead wrote.
Silvercorp sued Chinastockwatch.com and Alfredlittle.com and their operators in September, accusing the sites of publishing false information to lower the company’s share price and profit on short sales. In a short sale, an investor sells borrowed shares, hoping to return them to the lender after buying the stock back at a lower price.
Anthion in March filed a countersuit identifying itself as the author of an anonymous report on Silvercorp that was sent to securities regulators, auditors and journalists and later published on Chinastockwatch.com.
The case is Silvercorp Metals Inc. v. Chinastockwatch.com, 150374/2011, New York State Supreme Court (Manhattan).