August 12, 2010 / 3:00 PM / 9 years ago

Lehman: Och-Ziff resists subpoena bid on collapse

NEW YORK, Aug 12 (Reuters) - Lehman Brothers LEHMQ.PK says hedge fund company Och-Ziff Capital Management Group OZM.N is stonewalling its efforts to subpoena information related to Lehman’s collapse and that a bankruptcy court should force it to respond.

The move is part of a broader investigation by the failed financial firm into the “rumor mongering” two years ago that it says undermined its reputation and contributed to the shortselling it says had a role in its collapse.

In April, Lehman filed subpoenas for information from hedge funds Greenlight Capital, SAC Capital Advisors, Citadel Investment Group and Och-Ziff as well as Goldman Sachs & Co [GSGSC.UL].

Och-Ziff responded to the subpoena in a court document filed in June by saying that the request was unwarranted and would require it to spend $3.3 million to produce 3.9 million electronic documents. It also said that it had nothing to gain by Lehman’s bankruptcy, which it said caused significant losses for Och-Ziff.

A spokesman for Och-Ziff declined to comment further.

In the court documents filed on Wednesday, Lehman said it is seeking information on the hedge fund company’s short positions in its stock, trading strategies, internal and external communications about Lehman and Lehman-related disciplinary actions or investigations for 2008.

Lehman argued that it is the debtors’ right under bankruptcy law to ask for this information, even if it is a “fishing expedition.”

Lehman asked the court to either force the company to comply with its initial subpoena or to order a modified version in which Och-Ziff would produce records of trading in its own accounts, known as proprietary trading, and identify the fund employees who worked on or with Lehman among other specifics.

Lehman’s investigation follows that of the Securities and Exchange Commission, which said in September of 2008 that it planned to do a sweeping inquiry into possible market manipulation in the securities of certain financial firms. (Reporting by Caroline Humer, editing by Dave Zimmerman)

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