AR Magazine next week will respond to Elliott Management’s motion to compel discovery against the publication, which the New York hedge fund filed last week. Elliott is asking the New York State Supreme Court to make AR reveal the source of a news story based on the fund’s quarterly investor letter. The story will appear in the September edition of AR.
Elliott filed a petition in the court on August 19 alleging that the disclosure of the fund’s positions and their performance—which are included in the letter and the story—would “cause significant harm to Elliott and negatively affect its competitive advantage in relation to other market participants.”
AR will file an affidavit to the court on September 2 with its response. A hearing is set for September 9.
Elliott’s legal action is an unusual move even in the opaque world of hedge funds. Managers have lately taken steps to prevent their documents from being widely distributed, such as watermarking them or employing technology that does not allow users to print or forward them, but this is believed to be the first time a hedge fund manager has taken legal action against a publication in an attempt to uncover a source. The complaint has received a fair amount of news coverage, including a front-page story in the New York Post’s business section on August 21.
AR has already published a story online about the investor letter, including information about some of its positions. Elliott, which manages $17 billion, was founded 33 years ago by Paul Singer.