Jim Chanos
Scott Mlyn | CNBC
Famed short seller Jim Chanos called the lawsuit accusing him of embezzling personal funds “false, baseless and defamatory.”
Chanos issued a statement to CNBC’s Scott Wapner in response to allegations made by a former Chanos & Co. investor.
Conlon Holdings, a Chicago firm run by Sean Conlon, filed suit in New York state court on Friday, alleging that Chanos used his firm as a “piggy bank” for $10 million in outstanding loans he took out from his company on period of more than a decade.
“As Mr. Conlon is aware, the internal loan was repaid in 2021 and I have invested over $30 million in my company since 2019,” Chanos said in a statement. “Indeed, all of my fellow management company partners have lost money over the past few years, and no one more than me. “Mr. Conlon is simply trying to cushion his losses with this crude attempt at extortion.”
Conlon did not immediately respond to a request for comment.
Chanos, best known for calling the collapse of energy trading company Enron, closed his hedge fund late last year and turned it into a family office and advisory business. His decision came after years of failures in which short bets, including Tesla, failed to work.
The suit also alleges that Chanos sold his Miami condo, which was formally owned by Chanos & Co., for $17.8 million earlier this month without notifying his partners in advance. Meanwhile, the suit said Chanos’ girlfriend, Crystal Conners, was the sales agent on the deal, which would have been worth $540,000 at standard commission rates.