Regions

Hedge funds prod regulator to launch probe on World Acceptance Corp- sources

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October 30
3:11 AM 2013

Sources told Bloomberg that some hedge fund companies had urged the US Consumer Financial Protection Bureau to probe installment loan company World Acceptance Corp. The funds asking for the investigations included Kase Capital Management and North Run Capital. According to the sources, the lender allegedly practiced unfair lending practices. The sources added that the World Acceptance had preyed on borrowers who had low income.

In an interview with Bloomberg, however, World Acceptance Chief Executive Officer A. Alexander McLean said he did not believe the regulator would investigate his firm. He denied the allegations from the hedge funds. He added, "We are under constant attack from the self-serving short sellers."

Records from the consumer bureau also showed that Crosslink Capital Inc had also requested for documents about World Acceptance. However, consumer bureau spokesman Sam Gilford would not comment on the matter. Kase Capital Managing Partner Whitney Tilson had earlier told investors in July in a letter that the company had held a short position on World Acceptance shares. The letter also said action against World Acceptance by the consumer bureau was most likely.

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