The 63-year-old founder of the Milburn, N.J. -based Rocker Partners said he will surrender all portfolio management responsibilities effective Jan. 7. His partners, David and Marc Cohodes, will split his duties as managing general partner.
Rocker denied Thursday that growing pressure from the Overstock case - including unfavorable recent court rulings and news that the Securities and Exchange Commission is investigating associates at co-defendant Gradient Analytics - had played a role in his retirement.
"There are people out there who are trying to construe this as something connected to Overstock, and it's not," he insisted.
Rather, he said that with his retirement announcement, "I will be free [to pursue] philanthropic and civic [interests], including the rising threat to free expression, and I'm very serious about that."
In a brief statement, Rocker Partners said it does not plan on changing its approach to investment, but otherwise added little.
Overstock CEO Patrick Byrne weighed in Thursday by referring to a Marin County, Calif., judge's refusal last month to dismiss Overstock.com's libel and unfair business practices lawsuit against the Gradient market research firm.
"Oddly Mr. Rocker's retirement announcement comes just two weeks before the Marin County Court is scheduled to rule on whether we can proceed with our [evidence] discovery requests," Byrne said. "I suspect the only civic duties he will have time for are responding to court-ordered discovery."
Founded in 1985, Rocker Partners today is one of a relative handful of hedge funds that specialize in short selling - a practice where investors borrow and sell stock, betting they can buy it back and bank the difference when share prices fall.
Overstock contends that in timing with numerous critical reports issued by Gradient, short-sellers such as Rocker had triggered a share price slide from a high of $77.18 in January 2005; on Thursday, Overstock's shares closed at $27.38, up 51 cents, or 2 percent.
Gradient has said it will appeal the Marin County ruling that said the trial can proceed on Overstock's allegations.
Among other things, Gradient had argued that California's SLAPP, or the Strategic Lawsuit Against Public Participation law, applied because the intent of the lawsuit was to staunch criticism of the Salt Lake City-based online closeout retailer.
Marin County (Calif.) Superior Court Judge Vernon Smith rejected that argument. He also refused to dismiss affidavits from three former Gradient employees supporting Overstock's claims. Gradient had questioned the trio's veracity, arguing they had been fired for cause.