* Lehman seeks information on fund activities
* Attorneys investigating possible 'illegal activity'
(Adds Goldman declines to comment)
By Emily Chasan
NEW YORK, April 19 Lehman Brothers Holdings Inc
LEHMQ.PK wants to investigate David Einhorn's Greenlight
Capital, Steven Cohen's SAC Capital Advisors and other hedge
funds over whether they took improper actions that damaged
Lehman's business ahead of its collapse, court documents show.
On Friday, attorneys for Lehman Brothers filed notices of
subpoena for hedge funds Greenlight, SAC, Citadel Investment
Group, Och-Ziff Capital Management and Goldman Sachs & Co
(GS.N), seeking access to documents and employees to conduct an
The attorneys at Kasowitz, Benson, Torres & Friedman LLP,
were hired as "special counsel" by Lehman Brothers in January
to investigate whether certain "third parties" made "statements
that interfered with, and damaged (Lehman's) business." They
are also investigating whether any "illegal activity"
The subpoenas filed by Kasowitz Benson on Friday are the
first formal step to obtaining more information from the funds
that could potentially be used to build a legal case against
them. Funds generated by any lawsuit would be used to repay
Einhorn publicly discussed his fund's short position in
Lehman stock as early as April 2008, fewer than six months
before the investment bank collapsed into the largest
bankruptcy in U.S. history on Sept. 15, 2008.
His concerns about Lehman's accounting, were strongly
contested by Lehman staff, who accused him of "cherry picking"
items from Lehman's quarterly filing and distorting them.
Similar concerns about Lehman's accounting policies were
recently brought up in a report from the court-appointed
examiner charged with investigating Lehman's collapse.
According to documents recently revealed in Lehman's
examiner's report, a Lehman employee emailed staff at the U.S.
Securities and Exchange Commission in June 2008 to complain
that "3 hedge funds are collaborating" to fuel false
information and rumors that were destructive to the firm. The
letter did not name the funds it referenced.
Greenlight Capital, Och-Ziff, Goldman and Citadel declined
to comment. A representative for SAC was not immediately
The case is In re: Lehman Brothers Holdings Inc, U.S.
Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Emily Chasan; editing by Andre Grenon)