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Ex-NYSE director sued for $1.8 billion

A Florida businessman has sued ex-NYSE  director Kenneth Langone for $1.8 billion, claiming he made false statements about data management company Seisint in hopes that ChoicePoint Inc. could buy it for a low price.
/ Source: Reuters

A Florida businessman has sued former New York Stock Exchange director Kenneth Langone for $1.8 billion, claiming he made false statements about data management company Seisint in hopes that ChoicePoint Inc. could buy it for a low price.

Seisint founder Hank Asher said in the suit that Kenneth Langone, a ChoicePoint board member, told rival bidders for the company that its "books were cooked" and that it was run by "bad people."

The suit, filed Tuesday in Broward County Circuit Court, said Langone intended to help ChoicePoint, a company on whose board he sits, to buy Seisint at an artificially depressed price.

Anglo-Dutch media company Reed Elsevier bought Seisint for $775 million earlier this year.

Asher, who owned 35 percent of Seisint stock, said the "false and malicious communications" to bidders, including Kroll Inc. chairman Jules Kroll, caused several to withdraw or lower their offers. One of the bids withdrawn as a result was $225 million higher than what Reed Elsevier paid.

Asher had left the board of Seisint by the time the sale went through, following reports that he had been granted immunity in a cocaine-smuggling case in 1987.

The suit named Langone, already embroiled in another court case over a controversial $188.5 million pay package for former NYSE Chairman Richard Grasso; Langone's investment company, Invemed Associates; Alpharetta, Georgia-based ChoicePoint; its chief executive, Derek Smith; and two of its directors, Douglas Curling and David Lee.

Asher's attorney, James Carroll, said the suit sought $600 million in damages and sought to use an aspect of the law that would allow that to be tripled to $1.8 billion.

Neither Asher nor Langone were immediately available for comment.

Besides saying Langone defamed and maligned Asher and Seisint, the suit said Langone and ChoicePoint had violated Florida antitrust laws by trying to force Reed Elsevier to sever all business links to Asher and by trying to squeeze him out of the data management business.

Asher added in the suit that Invemed had breached fiduciary obligations to him by unlawfully dealing in stock he held.

Seisint marketed software that allowed law enforcement agencies and others to search databases. It found itself at the center of a civil liberties furor in 2003 after it began work with several U.S. states to develop a system for identifying terrorists by cross-referencing public data with police files.