Manulife Wins Legal Case as Judge Dismisses Hedge Fund Claim
- Insurer became short-seller’s target after lawsuit filed
- Company was ‘always confident we would ultimately prevail’
Manulife Financial headquarters in Toronto.
Photographer: Norm Betts/Bloomberg
Manulife Financial Corp. and other Canadian life insurers won a legal battle against hedge funds that contended the insurers should be compelled to take unlimited deposits into high-yielding investment policies.
A Saskatchewan judge dismissed claims by Mosten Investment LP and other funds that there should be no caps on investments in life insurance policies from the late 1990s with guaranteed rates of at least 4 percent. Short-seller Carson Block, who runs investment firm Muddy Waters, said last October that he was shorting Manulife over the lawsuit, saying it could lead to billions in losses for Canada’s biggest life insurer. Bank of Montreal and Industrial Alliance Insurance and Financial Services Inc. faced similar legal challenges.