Hedge Fund Backs Investor Suit Against Volkswagen

A subsidiary of Elliott Management, the hedge fund founded by Paul E. Singer, is bankrolling a lawsuit by institutional investors that suffered losses due to Volkswagen’s emissions cheating. The case opened in a German court on Sept. 10. It’s sweet revenge for Singer, whose fund lost big shorting VW stock in 2008. The stock rose instead. The fund claimed stock manipulation, but couldn’t get a hearing for that allegation in court. The lawsuit Elliot is funding is one of several suits claiming more than $10 billion in damages. High ranking VW execs are expected to testify for the first time since the scandal came to light. Shareholders backed by Elliott include the California state teachers’ pension fund and the fund that invests Norway’s oil money. Elliott is paying upfront costs, and will collect up to 30 percent of any winnings. VW says that the wrongdoing was the work of engineers and managers at a level below management.