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In his six-year fight against an American hedge fund, Canada’s Prem Watsa, CEO of Fairfax Financial Holdings Limited (TSE:FFH) (PINK:FRFHF) may soon see a resolution. And it could just depend on the answer to the question, “Did Morgan Keegan & Co., Inc. report bad news about the tycoon a decade ago just to favor the baron?

Recently a New Jersey state court ruled that Watsa’s lawsuit against the investment firm Morgan Keegan & Co. now has a Sept. 10 trial date.

Morgan Keegan, the Memphis-based investment firm, has been accused of conspiracy, trade libel and intentional interference by the Toronto-based insurer Fairfax Financial Holdings Ltd. The company is asking for $8 billion in compensatory damages, reported the Commercial Appeal.

Meanwhile, Watsa has argued that the stock value of his Fairfax Financial Holdings Limited (TSE:FFH) (PINK:FRFHF) dove in 2003 after a “bear raid” by Wall Street firms through Morgan Keegan’s help.

For the investment firm, it would hurt Regions Financial Corporation (NYSE:RF), the Birmingham-based bank that acquired them in 2001 and later sold out to Raymond James Financial Inc. for $1.2 billion. With the deal, Regions agreed to assume responsibility for Morgan Keegan’s legal costs.

“Warren Buffet of the North”

But wait, there’s a little more to this story.

Watsa had once been called the “Warren Buffett of the North” by a Canadian Business magazine. Many investors may also have forgotten that the Canadian investor has a 2.25 percent share in Research in Motion Limited (TSE:RIM) (NASDAQ: RIMM); back in January, he joined the challenged company’s board of directors.

His appointment gave investors hope, reported Bloomberg.

But in addition to that and his lawsuit, Watsa has also been try to get alleged damages in billions of dollars from the hedge fund billionaire and part New York Mets owner, Steven A. Cohen.

Cohen sits at No. 34 on Forbes’ wealthiest Americans with his $8.2 billion net worth.

But how does he fit into the Watsa vs Morgan Keegan 2006 case?

The lawsuit alleged, “Cohen personally has one of, if not the, most powerful market-moving capabilities on Wall Street.” It also argued that Cohen’s wealth allowed him to drive seven other hedge funds to scheme with his S.A.C. Capital Management LLC in a move to push down Fairfax Financial’s stock price; this is the Toronto firm that Watsa founded.

Cohen was also able to profit from short sales thanks to the decline of Fairfax’s stock price, claimed the lawsuit. Morgan Keegan factored into it from a 2003 employee report by research analyst John Gwynn. He warned investors of Fairfax’s financial problems.

After the report came out, Fairfax’s share price soon fell 20 percent; this is also included in the lawsuit.

Fairfax has found its problems linked to insurance companies recently acquired by Watsa as they eventually became part of Fairfax. Additional analysts concurred with the Gwynn report but Fairfax sued the Memphis firm, S.A.C. and seven additional hedge funds.

During the following six years, seven hedge funds have been dismissed from the lawsuit but last week, Judge Stephan Hansbury of state Superior Court in Morristown, N.J., ruled that Fairfax’s case against S.A.C. spinoff Exis Capital Management Inc. and Morgan Keegan will go to trial.