Homebuilder Lennar is fighting back against claims that its business is a Ponzi scheme. Last week, self-styled fraud fighter Barry Minkow (an ex-fraudster himself) claimed that the company, through a series of homebuilder JVs, was basically a giant fraud — and in this jittery environment, the stock tanked about 20% on the news.
Now the company is suing Minkow for libel and extortion, according Charlie Gasparino on CNBC. Actually, it’s adding Minkow as a defendant in a lawsuit its already filed against Nicholas Marsch, the disgruntled homebuilder that hired Minkow to press a case against Lennar.
Minkow needs to put up or shut up, and do a better job cooly explaining the fraud case against Lennar. His initial argument was confused and poorly backed — plus he didn’t help his case with the bizarre video in a Hawaiian shirt. The proper avenue to air fraud allegations against a public company is the court system or the SEC, not YouTube.
More to come.