AAMC Files Lawsuit Against Former Board Member Nathaniel Redleaf for Improperly Disclosing Confidential Information for Financial Gain

CHRISTIANSTED, U.S. Virgin Islands, Oct. 31, 2022 (GLOBE NEWSWIRE) -- Altisource Asset Management Corporation (“AAMC” or the “Company”) (NYSE American: AAMC) today filed a complaint in the Superior Court of the U.S. Virgin Islands, Division of St. Croix, against former AAMC board member Nathaniel Redleaf, who improperly disclosed confidential information of the firm to financially benefit himself and his current employer, New York-based hedge fund Luxor Capital Group (Luxor).

As outlined in the complaint, Redleaf engaged in a secret scheme to illegally use AAMC’s confidential information to benefit Luxor, a $12 billion hedge fund founded by Christian Leone, a former Goldman Sachs analyst. Luxor acquired 19.7 percent of AAMC and then had its partner, Redleaf, join the AAMC board as part of a plan to funnel confidential information back to Leone and Luxor.

One aspect of the scheme involved Luxor’s $150 million investment into AAMC preferred stock. The proceeds of that investment were used to buyback AAMC’s common stock, thereby increasing the value of Luxor’s stake in AAMC’s common stock, which at the time was valued at more than $350 million. The nonpublic information that Redleaf was privy to as an AAMC board member was illegally used by himself and Leone to make investment and trading decisions.

Instead of adhering to the well-established compliance practice of setting up an ethical wall to ensure that material nonpublic information is not disclosed to a hedge fund that employs a director of a public company, Redleaf improperly disclosed the information to Luxor as noted in the complaint. Luxor anticipated making hundreds of millions of dollars on the position it built.

Redleaf’s actions harmed AAMC and its shareholders. AAMC is seeking to recoup any of Luxor and Redleaf’s ill-gotten gains through this litigation.

About AAMC

AAMC is an alternative lending company that provides liquidity and capital to under-served markets. We also continue to assess opportunities that could potentially be of long-term benefit to shareholders such as Crypto-ATMs.

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