The head of a $1.2 billion hedge fund was among a group of investors that lost millions in investments after Donald Trump sued them, according to new court documents.
In the lawsuit filed Wednesday, Trump accused hedge fund manager William Ackman and his brother, Sam, of ripping off investors through aggressive trading tactics.
The complaint, filed in federal court in Manhattan, alleges that Ackman’s investment firm, Pershing Square Capital Management, used a “predatory pricing strategy” to make money by buying and selling stocks on a daily basis, then pocketing the profits in fees.
Ackman and Sam Ackman have not been charged with any wrongdoing.
But the suit accuses Pershing of violating the Securities Exchange Act of 1934 by “market manipulation” and “predator-proofing” its trading.
It accuses Pershings trading algorithms and algorithms used by Ackman to buy and sell stocks, known as “hedge fund” algorithms, and “market makers,” a term used to describe the trading strategies used by hedge funds.
The suit also alleges Pershing violated the Securities Act by paying Ackman a commission for each trade it made.
The Ackmans declined to comment.
The case has generated a firestorm of criticism for the president and the hedge fund industry.
The president, who has said the lawsuit was frivolous and made the country look bad, has not weighed in on the case.
He has called it a frivolous lawsuit and called the allegations against Ackman “ridiculous.”
The president also said the allegations are “ridos” and an example of the president’s “silly” behavior.
Trump, who is facing a national political scandal and has said he could sue anyone, has accused the hedge funds of “bullying” investors.