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May 31, 2007

The new vote buying

Elizabeth Judd looks at what regulators are doing to prevent hedge fund overvoting.

What if an investor borrowed shares or engaged in an equity swap, acquired voting rights on your company’s record date, and then attempted to alter the outcome of a pivotal election? ‘Been there, done that,’ some hedge funds could boast. Known as ‘empty voting’, this practice has rocked a handful of companies with highly contentious shareholder contests under way. In the US, the poster child for empty voting is Perry, a hedge fund that held a position in King

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