This is a weird development not directly related to portfolio holding Fairfax Financial (FFH/NYSE).
In fact, it might not even be indirectly related. Yet this report by Ian McDonald in The Wall Street Journal is undeniably noteworthy:
A free-lance stock analyst at the center of a high-profile civil court case against prominent U.S. hedge funds was arrested on seemingly unrelated criminal wire-fraud charges in New York Monday afternoon, according to a person familiar with the matter and court documents filed by the U.S. Attorney's office in federal court in New York Monday.
Spyro Contogouris, a stock analyst that Toronto-based insurer Fairfax Financial Holdings Ltd. has accused in civil court of spreading false rumors about the company and harassing executives in recent years to drive down the company's stock price, was taken into custody by the Department of Justice Monday afternoon, this person said.
Mr. Contogouris faces criminal wire-fraud charges. It isn't clear from the court filings what the charges related to. Mr. Contogouris isn't accused of wire fraud in the Fairfax complaint, but is involved in other, unrelated civil litigations.
You don't have to be a lawyer, or even a Court TV addict, to know that Spyro Contogouris is innocent until proven guilty. And I certainly have no idea whether these charges have merit, or even the validity of Fairfax's court action filed in July.
But plenty of people were skeptical of Prem Watsa's motivation in going to court last summer. Today's development, while not directly related, should give Watsa-haters pause.
And give Fairfax shareholders no reason to regret holding the stock.
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