City of Liberty

NEW YORK (Reuters) - UBS AG lost a bid Tuesday to dismiss a whistle-blower lawsuit by a former commercial mortgage-backed securities strategist who said he was fired for refusing to publish misleading research reports.

The fallout from Digital Domain Media Group’s bankruptcy continues with investors in the troubled special effects and 3D conversion firm taking the former CEO, the company’s auditors and other executives to court for fraud. Having lost millions in the James Cameron-founded company just before it went under last September, Iroquois Master Fund and Kingsbrook Opportunities Master Fund late last week filed a six claim complaint (read it here) against John Textor, his wife Deborah, various DDMG directors and auditors SingerLewak LLP. The plaintiffs are seeking compensatory damages as well as interest, legal fees and “such other and further relief as the Court may deem just and proper.” The complaint in New York State Supreme Court alleges common law fraud, aiding and abetting fraud, negligent misrepresentations and omissions, negligence, breach of the implied covenant of good faith and fair dealing and civil conspiracy. “The Director Defendants’ assurances that DDMG had sufficient cash and available borrowings to support its operations through 2012 and into 2013 and that Company was likely to turn cash-flow positive in the latter half of 2012 were materially false and misleading,” says the 61-page complaint. DDMG filed for Chapter 11 protection last fall with less than $50,000 on hand. Soon afterwards the Oscar winning company, which was working on several Hollywood features when it ... Read More »