Arconic used ‘fake news’ to scare shareholders: lawsuit

Arconic, the aluminum parts maker under fire from an activist investor, used “fake news” to scare shareholders from voting in new board members, the Atlanta Firefighters’ Pension fund claimed in a lawsuit filed Thursday.

Last week, Arconic said in a regulatory filing that the election of four board nominees put up by activist hedge fund Elliott Management could trigger a “change in control” provision under the company’s deferred compensation and retirement trust.

Such a change could create a $500 million liability, the company said.

“This disclosure is the very essence of ‘fake news,’” the smoke eaters’ pension fund said. “There is no change in control under the trust agreement, and the board knows it.”

The lawsuit is the latest blow for Arconic, which is under attack by Elliott Management, the hedge fund run by Paul Singer. The battle claimed a high-profile victim this week when Arconic CEO Klaus Kleinfeld was ousted after bringing a soccer ball to the grenade fight between Arconic and Elliott.

Kleinfeld sent Singer, a soccer fan, a commemorative 2006 World Cup ball — along with a letter that Elliott believes was a bizarre attempt to extort the hedgie. Arconic’s board said the unauthorized letter showed “poor judgment” — and forced Kleinfeld out.

Representatives from Arconic did not respond to requests for comment.