Monitoring Report
The US healthcare real estate company Medical Properties Trust (MPT) has started a defamation lawsuit in a US federal court against short-selling Viceroy Research and its three members over what it says are bogus, fake and fraudulent financial analysis reports linking it to medical company Steward Healthcare International (SHCI) Malta hospitals issue.
One of the biggest real estate medical companies in America, MPT has sued for defamation the Viceroy Research LLC and its members Fraser John Perring, Gabriel Bernarde and Aidan Lau following the short-selling Viceroy Research “repeatedly publishing baseless allegations to drive down the company’s stock price”.
MPT maintains in its scathing filing that Viceroy Research has been involved in a conspiracy against the company to make money by spreading false news and therefore the lawsuit seeks permanent injunctive relief, disgorgement of ill-gotten gains, compensatory and punitive damages from Viceroy for defamation, civil conspiracy, tortious interference, private nuisance, and unjust enrichment.
MPT, which leases hospital property to medical groups in the United States, has told the District Court of Alabama that Viceroy Research deliberately and maliciously lied in its reports “about its connections to Steward” in Malta for nefarious purposes and to “prop up its short attack” against the company by claiming it is deliberately concealing secret ownership in Steward-connected hospitals in Malta. MPT has denied any links in its legal claim filed in the state of Alabama where MPT headquarters are based.
“These are falsehoods, ginned up to try to undercut investor and public confidence in MPT and harm the company,” says MTP said in court filings, describing Viceroy Research’s reports as completely false and a clear-cut case of market manipulation aimed at driving down MPT’s share price in a clear case of short-selling exercise.
MPT says in its claim that Viceroy Research and its team – Fraser John Perring, Gabriel Bernarde, and Aidan Lau – are “in the business of mounting serial short-and-distort attacks against public companies” and that “MPT is their latest victim” as MPT has been linked by them with the Malta deal, maliciously and falsely, in a bid to damage its share price and make a short-selling profit off what it says was bogus research it published.
In the court filing, MPT says that Viceroy follows a playbook for such malicious attacks: “The playbook for these attacks is simple: Take a short position in a stock or partner with someone who has one, publish false ‘research’ critical of the target company, amplify the false claims on social media, and then reap a profit— either directly, from the stock price drop you bet on and then caused, or indirectly, by collecting payments from other market players who profited on the drop.”
The lawsuit says “this action arises from a campaign to defame, injure, and drive down the stock price of MPT, one of Alabama’s largest public companies and its largest real estate investment trust (“REIT”).
MPT lawsuit says Viceroy Research’s Fraser Perring—a self-proclaimed “Grand Poobah” of short-sellers — “entered the distortion game after British regulators revoked his social work license upon finding that he had lied and fabricated evidence. Perring founded Viceroy with Bernarde and Lau in 2016, and the firm has become notorious for short-and-distort schemes. In 2021, for example, a South African regulator fined Viceroy’s members millions of dollars for spreading false and misleading claims about a South African bank on behalf of a hedge fund that was trying to drive down the bank’s stock price. Defendants escaped justice, however, when a tribunal vacated the penalty for a jurisdictional defect.”
The claim says: “Short-selling is not illegal in the United States, and criticism of public companies is integral to our capital markets. Nor is it illegal to couple short-selling with criticism of a target company, provided the speaker does not deliberately or recklessly misrepresent facts for profit. But Viceroy does not play by the rules.”
MPT has alleged that for months, Viceroy Research, its three members and their cohorts have been spreading malicious falsehoods about MP and in late January 2023 announced it held a short position in MPT and simultaneously published the first of 14 “reports” on the Company in a steady stream.
The lawsuit says Viceroy Research made false accusations that MPT purportedly engages in illegal “round-trip” transactions by “overpaying” owners of hospital properties and leasing those properties back to the sellers and that MPT executives were engaging in “fraud” and juicing their own compensation. At the same time, the lawsuit says, Viceroy, Fraser and others started a Twitter campaign using the hashtags “#fraud” and “#Ponzi scheme”— urging investors to dump MPT stock, accusing MPT of “involvement in #Corruption” and “scamming investors,” and promising his followers that MPT’s “employees will go to prison.”
MPT says that these allegations by Viceroy Research, Fraser John Perring, Gabriel Bernarde and Aidan Lau are “malicious fiction, concocted to manipulate the market and to drive profits from short-selling. As outrageous as they are, Defendants’ falsehoods have influenced the market and caused serious harm to MPT. Since Viceroy began its attacks, MPT’s stock price is down over 35 percent, a potential counterparty has pulled away from a commercial transaction, and MPT has had to increase physical security at its Birmingham headquarters. Several analysts who follow MPT have observed the impact that the short attack has had on the stock.
