A US hedge fund has created another twist in the saga of the so-called "Panama Papers".

The law firm at the centre of the Panama Papers saga reportedly faces a lawsuit from a US hedge fund that successfully sued Argentina.

Paul Singer's Elliott Management Corp has accused Mossack Fonseca of helping Argentine clients hide money as Elliott was pursuing the Argentine government to pay off defaulted bonds. The lawsuit filed in a Nevada court in late May and obtained by AFP, the newswire, focuses on Mossack Fonseca's business of setting up anonymously-owned companies and trusts for clients often seeking to hide funds offshore from tax and legal officials, the report by AFP said.

The lawsuit says that while it was pursuing its claims against Argentina, in 2014 Elliott's unit NML Capital sought help in identifying and tracing assets linked to some shell companies registered in Nevada. But it said that Mossack Fonseca, though having evident close links to "MF Nevada" - a corporate services provider linked to those shell companies - insisted in the court that the two only had very limited ties. For that reason, Mossack Fonseca insisted it could not provide the data the NML wanted.

A report in May, also by AFP, stated that Mossack Fonseca is suing a journalists’ group for leaking data it says is false. The law firm is filing suit against the International Consortium of Investigative Journalists. The ICIJ has put a searchable database of more than 200,000 offshore companies onto its website. The Washington DC-based organisation first revealed that it had obtained the leaked, or stolen, data in April. 

The Panama Papers saga has seen the downfall of Icelandic prime minister Sigmundur David Gunnlaugsson, and, ironically, a senior Chilean figure in the global watchdog on dirty money, Transparency International. The papers also purportedly show that Australian premier Malcolm Turnbull had a British Virgin Islands-based firm that was created by Mossack Fonseca. UK prime minister David Cameron’s late father also had an account at one stage that was based out of Panama. To see an article about some of the issues around confidentiality and privacy that are raised, click here.

The affair has reignited debate on the proper distinction that should be drawn between legitimate client privacy and secrecy, as well as the issue of whether beneficial owners of trusts and other structures should be publicly disclosed. The ICIJ’s database is drawn from the 11.5 million documents leaked from Mossack Fonseca.