On July 11, 2018, the financial website Seeking Alpha posted an article by a pseudonymous author calling himself Rota Fortunae that made various claims about Farmland Partners Inc., a Colorado-based agricultural real estate trust. The central potentially damning takeaway from the post was that FPI faced “a significant risk of insolvency.” The company’s stock took a 39% hit on the day of publication.
Fast forward nearly three years and FPI’s lawyers at Morrison & Foerster have pulled off a rare victory for a company targeted in a so-called short and distort scheme, where traders taking a short position on the company’s stock price spread false rumors to drive down its value. A team led by Denver partner Scott Llewellyn and New York partner Michael Birnbaum not only unmasked the pseudonymous author, short-seller David Quinton Matthews, but also scored a settlement that includes a multiple of the profits he and his business partners made. As part of the settlement, Matthews also posted a mea culpa on Seeking Alpha and Twitter acknowledging false statements within his original post. Llewellyn and Birnbaum, our Litigators of the Week, answered the Litigation Daily’s questions about the case jointly.