Lawyers, journalists, and investors are closely watching a suit brought by hedge fund manager David Einhorn against investing website social media site Seeking Alpha via which Einhorn hopes to learn the identity of an anonymous blogger whom Einhorn claims cost him money.
As Andrew Ross Sorkin wrote in The New York Times Monday, Einhorn filed the suit after Seeking Alpha revealed his stake in Micron Capital just as the Greenlight Capital head was moving to keep those holdings secret through a filing with the Securities and Exchange Commission.
Einhorn claims the disclosure of his Micron investment caused the company’s stock price to surge, which, in turn, caused him to lose money, Sorkin wrote.
According to Sorkin, Judge Carol R. Edmead of New York state Supreme Court told Seeking Alpha representatives to appear at a hearing originally set for Tuesday to explain why she should not grant a motion filed by Einhorn asking the court to order that the blogger’s identity be revealed. The hearing was postponed until April 1.
The case is shaping up as a battle pitting the First Amendment against securities law, Sorkin wrote. Meanwhile, journalists—who have their own interest in the proceedings—took to Twitter whether bloggers and potential sources should be allowed to remain anonymous if they choose.
Reuters finance blogger Felix Salmon tweeted that Seeking Alpha founder David Jackson’s refusal to comment to Sorkin, as noted in the latter’s Times’ story, was “not reassuring.” He added that he was watching for signs that Seeking Alpha “will do everything it can to protect its pseudonymous blogger from Einhorn.”
To which ProPublica senior reporter Jesse Eisinger, who also writes for Sorkin’s Dealbook blog, tweeted, “Amen. Step up, Mr. [Jackson].”