Times Online – Hedge funds were heading for a full-blown row with the German Government last night as it emerged that funds sitting on tens of billions of euro losses after short-selling Volkswagen could go bankrupt.

Porsche, VW’s biggest shareholder, stands to pocket a quick €6billion (£4.7billion) profit from the short-selling.

The London-based Alternative Investment Management Association (Aima), the hedge fund trade body, said yesterday that it planned to ask the European Union to clamp down on a controversial German legal loophole that allowed Porsche secretly to take its VW stake to almost 75 per cent.

Andrew Baker, Aima deputy chief executive, said: “This sounds somewhat irregular. If you tried that in this country, there would be a number of questions to be answered.”

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Law.com – Smith, Gambrell & Russell and one of its former attorneys are caught up in the expensive brouhaha surrounding International Management Associates, a now-defunct investment firm which bilked pro football players, a former Scientific-Atlanta CEO and other well-heeled investors of some $150 million.

IMA’s bankruptcy trustee, William F. Perkins, told a federal court last month that the law firm and a former counsel from its Washington, D.C., office, C. Gladwyn Goins, represented IMA so poorly that they not only allowed the company’s founder, Kirk S. Wright, to embezzle from investors long after his wrongdoing could have been discovered but also "helped Wright to continue his criminal misconduct."

Those alleged legal missteps cost the company "tens of millions" of dollars, according to the complaint, which demands that the firm and its former counsel pay more than $80 million in damages, plus attorney fees and litigation costs.

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