BOSTON (Legal Newsline) - Father Emmanuel Lemelson, a self-described “world-renowned priest” and “financial expert,” claims in a recently filed lawsuit that wire service Bloomberg defamed him in a March news article and his business has taken a major hit as a result.
Lemelson, in his lawsuit filed in Massachusetts Superior Court in May, accuses defendants Bloomberg LP and two Bloomberg employees, Jesse Westbrook, an editor, and Matt Robinson, a reporter, of publishing a false and defamatory article stating Lemelson and his firm, Lemelson Capital Management LLC, were being investigated by the U.S. Securities and Exchange Commission for illegal activities.
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The article cited “people with knowledge of the matter” as sources. The SEC, itself, declined to comment.
Lemelson, himself, told Bloomberg there is “not now, nor has there ever been,” an SEC or any other regulatory investigation into his firm.
The hedge fund manager, who, according to his lawsuit, has had “unmitigated success” in both his career and ministry, argues things changed, in both respects, soon after the news story was published.
“For anyone in the financial sector, the very accusation of dishonest and illegal activities can cause potential investors and partners to go in another direction,” said Lemelson, who noted that some of his potential investors have included Paul Allen, co-founder of Microsoft.
“But for Fr. Lemelson, as a priest, the harm has multiplied. Since Bloomberg published its defamatory article, promoted it through its media outlets, and disseminated it to thousands of people through social media, including Twitter, Fr. Lemelson’s steady stream of new investors has completely stopped.
“Within his Church, he is now a pariah.”
Lemelson said in the Eastern Orthodox Church it is customary for priests to not only have families but also have another profession to support their families.
As a hedge fund manager, Lemelson oversees and makes decisions about the investments in a hedge fund. A hedge fund, itself, is a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.
Lemelson alleges he has been removed from various assignments as a result of the Bloomberg article.
“Religious colleagues, who formerly had close personal and professional relationships with Fr. Lemelson, have ostracized him and his family,” he wrote in his complaint.
Lemelson seeks $100 million in compensatory damages for the March 18 article, “Hedge Fund Priest’s Trades Probed by Wall Street Cop.”
In a May news release, Lemelson said official records reveal that neither Robinson nor Westbrook or any other Bloomberg employee ever submitted a Freedom of Information Act, or FOIA, request with the SEC for any information that would have established their allegations.
“This is hugely irresponsible and libelous reporting based on non-governmental sources almost certainly seeking to advance some agenda unaffiliated with our firm or fund,” Lemelson said in a statement when the article was first published.
Ty Trippet, a spokesman for Bloomberg LP, declined to comment on the lawsuit in an email to Legal Newsline.
Last month, Bloomberg had the lawsuit transferred to Massachusetts federal court.
In its Aug. 15 removal notice, the company argues complete diversity exists -- i.e. the parties are citizens of different states -- and the amount in controversy exceeds $75,000.
Judge Timothy S. Hillman for the U.S. District Court for the District of Massachusetts now is handling the case, according to the docket.
Lemelson said in May he has been advised by his legal counsel, Burlington, Mass., attorney Thomas R. Mason, that the article “meets and exceeds” the threshold for the statutory definition of defamation, commercial disparagement, negligence and punitive damages.
Mason, himself, called the Bloomberg article “the most egregious example of indisputable and actionable defamation that I have witnessed in my 27-year legal career.”
Lemelson said his firm’s counsel has been assured by the SEC that neither Lemelson nor Lemelson Capital Management, which manages the Amvona Fund, are or have ever been the target of any investigation.
The fund was ranked in three months during 2013-14 among the world’s top performing hedge funds and, by mid 2015, the company reported a net return since its launch of 150 percent.
Lemelson’s investment research and analysis has been cited by various news sources, including The Wall Street Journal, USA Today, New York Post, Fox Business Network and The Street.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.