Hedge fund founder George Weiss has lost a defamation lawsuit against Jefferies Financial Group, marking the latest development in a long-running dispute over a $100m debt tied to his firm, Weiss Multi-Strategy Advisers report Bloomberg.

A New York court dismissed the claim, with Judge Phaedra F. Perry-Bond ruling that the allegedly defamatory statements were made in a draft legal complaint and were therefore protected. The court also noted that Jefferies ultimately prevailed in its underlying case, in which Weiss was found liable for the debt.

Weiss is expected to appeal the decision, maintaining that the ruling does not validate the substance of the statements made against him. A separate appeal relating to the debt judgment is scheduled to be heard in the coming weeks.

Jefferies declined to comment but has previously rejected the allegations, describing them as without merit and made in bad faith.

The dispute stems from negotiations prior to the collapse of Weiss’s hedge fund, which filed for Chapter 11 bankruptcy in April 2024. Jefferies has alleged misuse of funds by Weiss – claims he denies – while Weiss has accused the bank of attempting to damage his reputation during restructuring talks.

Following the firm’s collapse, Weiss filed for personal bankruptcy after being held liable for the debt. Court filings indicate he owes more than $100m to Jefferies, alongside a separate $180m claim from the IRS, both of which he is contesting.