Alleged Lying, Bullying, Compliance-Ignoring And Possible Fraud No Reason For Hedge Fund Not To Invest $50 Million With Outgoing Portfolio Manager

Spread the love


Evolution Capital Management says portfolio manager Robert Cagliardi’s tenure at the firm has been straightforward. He joined the hedge fund last April and performed well enough to earn a nearly $6 million bonus during his 11 months at the firm.

Now, Cagliardi’s short stints with bosses aren’t unusual: back in 2015, he spent them all. Two months and two days with Chain Capital. But Cagliardi’s time with Evolution was eventful. According to Evolution, in November of last year, Cagliardi told the company that he lost his cell phone on a flight to Los Angeles. Two days later, he told the company that wasn’t entirely true. In fact, he lost his phone U.S. Marshals took over As part of federal prosecutors Investigate whether block trading is a fancy corporate name for insider tradingand replaced it with a subpoena to testify before a grand jury about it.

Of course, Many people have fallen into this trap, and most, if not all, of them will not be accused of any wrongdoing, and to this day, Gagliardi has not. Therefore, as far as his employment is concerned, the crime is not the more probable and alleged securities fraud, but the crime of lying to one’s employer.

However, it should be noted that November is not 11 months after April. In March, Cagliardi was fired for ostensibly lying to his boss, but since Evolution itself was subpoenaed on the matter, investors began to worry about how it would feel to be part of a protracted federal securities fraud case. For its trouble, however, Evolution wants its $6 million back — and certainly doesn’t want to pay Cagliardi the $7.5 million he’s still owed in bonuses.

The thing is, says Cagliardi, the evolution between November and February Acted very strangely In addition to concerns about Cagliardi’s “extremely” combative nature with colleagues and a general disregard for compliance and risk management — for a company that allegedly violated Cagliardi’s trust and reputation.

Cagliardi’s attorneys said ECM’s claims were “an apparent power play to overburden the former employee’s efforts to seek compensation,” according to a motion they filed Dec. 12 to dismiss the New York suit. His lawyers said the allegations of misconduct were false.

“In return, ECM continued to hire Mr. Cagliardi, giving him a $5.96 million bonus and a $50 million investment” before he left the company to establish a new hedge fund. According to Gagliardi’s filing, months after ECM learned of the block-trading study, it offered to invest in his new venture.

In hedge fund pay dispute, a portfolio manager denies wrongdoing [Bloomberg]

For the latest and more on trends in litigation, regulation, contracts and financial services, Sign up A partnership between Breaking Media publications Above the Law and Dealbreaker for Finance Docket.


Source link

Leave a Comment