When Wall Street Bets On Lawsuits, Ordinary People Lose
Excerpt:
A major financial story is unfolding in the English courts that perfectly highlights the problems with the worldwide litigation funding sector and why Congress needs to step in to stop this new model of litigation from becoming entrenched in the American legal system.
According to reports, Gramercy Funds Management, a US-based hedge fund, has committed over $767 million to fund UK-based law firm Pogust Goodhead — around 10% of the asset manager’s total assets under management. And right now, that bet is going very wrong indeed.
Pogust Goodhead was funded to bring a massive class action lawsuit on behalf of over 400,000 people affected by the 2015 Fundão dam collapse in Brazil against BHP, the world’s largest mining company. It was always intended to be a landmark case and a huge windfall. But in a shocking development, the client committee for those 400,000 individuals voted to sack the law firm entirely.
.....This raises an obvious and disturbing question: what interests was Pogust Goodhead actually serving?
When a huge sum of money is at risk in litigation financed by a hedge fund, the interests of the funder will inevitably conflict with the interests of the claimants. Gramercy needed a massive settlement. The 400,000 claimants needed competent, unconflicted legal representation. Those two needs are not always met by the same people.
According to reports, Gramercy’s total exposure — once interest is factored in — could exceed $1.7 billion. Gramercy reportedly used funding vehicles in the Cayman Islands to keep the scope of its investment hidden from public view. Whether that money belongs to Gramercy itself or to its investors remains, according to reports, undisclosed.
.....A recent Washington Examiner piece exposed how third-party litigation funding has become a vehicle for unknown parties — foreign sovereign wealth funds, activist hedge funds, entities with geopolitical agendas — to bankroll lawsuits in American and British courts while remaining completely hidden from public view.
President Trump has spent his career exposing the ways powerful institutions are weaponized against ordinary people. This is one of the most under-the-radar examples. When a hedge fund bets $767 million on a class action, 400,000 real human beings with real claims become, functionally, a commodity. Their pain funds a financial instrument. Their resolution becomes secondary to the return on investment.
The British courts will soon decide who represents those claimants. That decision may wipe out Gramercy’s investment entirely. But the larger question — who funds litigation, with whose money, toward whose ends — will not be resolved in a London courtroom.
That question needs to be resolved by Congress. Third-party litigation funding must be disclosed. The court, opposing parties, and the public deserve to know who is really paying. The alternative is a legal system where the wealthiest and most secretive actors in the world weaponize courts without ever putting their names on a single filing.
********************
President Trump was the victim of a similar case where Reid Hoffman was unmasked as the one financing E. Jean Carroll’s made up sexual assault and defamation cases against Trump.
Agree with author that cases, especially class action lawsuit cases, should disclose if a third party is financing the plaintiffs’ lawsuit.
xxxxxxxxxxxxxxxxx
seems to me that the EU’s litigation funding “industry” is constantly suing “Big Tech” as a regular source of revenue
APPL, GOOG, META are recent examples, imo
they can't compete with big tech, but the can sue them for their cut?
Over the past year and half I have posted many links to Jay Valentine and his fractal computing tech. In 2025 actually saw it at a demonstration showing the ease with which it could verify county voter rolls, flag discrepancies such as voters that have moved, died or were noncitizens and the speed in which it was done.
His technology can also be applied to AI. His tech is one of innovating techs in the AI field without the big money or political backing like the centralized data center behemoths.
I am against the centralized behemoth data centers due to reasons I have outlined on earlier comments, but am a supporter of Jay Valentine’s tech as applied to AI.
*************************************************
A.I. Everywhere = End Of Central Data Centers
A.I. will be everywhere - eliminating the need for centralized computing -
https://theblackswanfiles.substack.com/p/ai-everywhere-end-of-central-data
Excerpt:
This is not the Age of A.I., it is the age of the greatest GroupThink phenomenon in a hundred years.
That groupthink is wrong - just like it always turns out to be.
A.I. will be everywhere.
Wherever there is data - there will also be A.I.
And A.I. everywhere spells the end of centralized computing - and the emergence of stranded data centers.
This week, political commentator Daniel Horowitz interviewed Jay Valentine of the Black Swan Files - and the interview went into great detail on why A.I. everywhere will kill off the data center madness.
Here is the interview - Daniel’s interview with Jay starts around 17:40
Link to interview: https://www.youtube.com/watch?v=erkuakBRpiM
******************************
Even if this becomes prevalent in use AI constitutional questions will arise on how it is used by government, law enforcement, citizens et al that will have to be addressed.