PE Fund Merida Sues Lender Over $3.2 Million Repurchase Pact

An investment firm manager lured $3.2 million in cash and stock from a private equity fund with a sham repurchase agreement that allowed him to pocket over $1.6 million when invoked, a lawsuit alleges.

Merida Capital Partners III LP followed up for months about getting its money and shares back, said its complaint filed in the US District Court for the Southern District of New York. But Jacob Fernane, founder of securities lending service Pacific Lion LLC, strung along Merida for months with “increasingly improbable excuses” or “simply disappeared for weeks on end,” the complaint filed Tuesday said.

Fernane’s conduct ...