Outsourcing firm Quindell says it has won a libel case against US-based Gotham City Research after it made “defamatory” claims about the outsourcing firm when shorting the stock.
The short-seller raised a number of queries about Quindell’s revenue model and business structure in a research report put out in April 2014 claiming that the firm’s balance sheet was “suspect” and describing the company as a “country club.”
Quindell’s stock lost approximately 72 per cent of its value following the report and the firm subsequently took legal action against Gotham City in the same month.
The board of Quindell announced in a statement today that the High Court had ruled in its favour against Gotham City after the short-seller did not offer a defense.
Quindell senior independent director and vice chairman Tony Bowers says: “We are pleased that following the co-ordinated shorting attack led by Gotham and others, we have been able to successfully win judgement from the High Court in our claim for libel against Gotham.
“Whilst it is disappointing that Gotham has not been prepared to submit itself to the scrutiny of the English Courts, we have consistently stated that we believe the Gotham publication was both defamatory and deliberately misrepresentative and it is pleasing to receive validation of our claim and success in this matter. The Company will continue to pursue actions of this type, where necessary, to protect its reputation and the best interests of its shareholders.”
The statement says Quindell had “entirely rejected” the conclusions made by Gotham City in the research note, describing its claims as “highly defamatory” and “deliberately misrepresentative”.
The High Court will now begin calculating damages to be paid out by Gotham City at the end of November 2014.