Clients Accuse Highland Of Spreading Lies

Law360, New York (July 8, 2009, 12:00 AM EDT) -- A group of wealthy clients who poured $50 million into two hedge funds that collapsed under the strain of the economic crisis is accusing Highland Capital Management's partners of spreading false information about the hedge funds' financial state.

On Wednesday, LV Highland Credit Feeder Fund LLC, flanked by a group of charitable and individual investors, filed a fraud suit in the U.S. District Court for the Northern District of Texas, accusing Dallas-based Highland Capital of hoodwinking them last fall.

They began investing with the funds in...
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