Firm charges PayPal founder, hedge fund with fraud

Pay "Pal"? I think not! Firm charges PayPal founder, hedge fund with fraud.

PayPal founder Peter A. Thiel and his hedge-fund management company, Clarium Capital Management, are accused of fraud in a lawsuit filed Monday.

The suit, filed in U.S. District Court for the Northern District of California by Amisil Holdings Ltd., names Thiel and Clarium as defendants, along with Clarium officers Jason Portnoy and Mark Woolway.

Amisil, a risk capital investor, seeks to recover the value of its investment in Clarium, which it said is worth as much as $18 million.

The suit claims that although Clarium received large sums from the 2002 PayPal initial public offering and its subsequent sale to eBay Inc., Amisil received no return on its Clarium investment from the transactions.

Clarium General Counsel Bruce Gibney said in a statement that Clarium believes Amisil's claims are based on numerous misstatements of fact and have no merit.

PayPal is a San Jose, Calif.-based online payment processing company.

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