Author Michael Lewis, featured here on Value Walk, has requested a Manhattan court to dismiss a libel suit filed against him by Wing Chau and his company, Harding Advisory LLC, without trial.
Lewis is the author of Liar’s Poker and Moneyball. In his book, The Big Short, which deals with subprime mortgages, Lewis is alleged to have defamed Chau. The book recounts how a select set of speculators made colossal amounts of money by shorting the residential subprime mortgage market, which busted in 2007.
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According to Chau, whose Harding Advisory manages CDO portfolios, the book made “false and defamatory statements about him” and damaged his reputation in the financial industry.
Steven Molo, Chau’s lawyer, claimed that the book “paints Mr. Chau as the worst of the worst” CDO managers.
After questioning, Judge Daniels is understood to have told Molo that most of his arguments were hyperbole and opinion.
“The plaintiffs are limited purpose public figures and the standard of actual malice has not been met,” Celia Barenholtz, a lawyer for Lewis, said, as per a report in Bloomberg. “There’s not an iota of evidence Michael Lewis thought anything he was writing was false.”
Lewis, in his defence, has claimed that Chau ignored numerous requests for an interview and that “I did not have any reason to doubt my sources, and believe that they were reliable, and the book was accurate. Many of the CDOs under Chau’s management eventually defaulted, and his investors had lost literally billions of dollars.”
Lewis was supported by his publisher, Starling Lawrence, who declared, “If I had any concerns about the accuracy of Lewis’s work, I would not have allowed Norton to publish it.”
Hedge fund manager Steven Eisman, an important source of information for the book, was also sued by Chau. Eisman was one of the investors who made money from shorting the subprime market. According to Chau, Eisman falsely attributed many statements credited to him in the book.
At one time Chau’s outfit ran about $20 billion of CDOs, one of the largest in that category, and included UBS AG (NYSE:UBS) and Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) as investors.