Former hedge fund employee sues firm for millions in lost pay

A former employee of the investment firm Archegos is suing the firm mand its founder Bill Hwang and five other former top executives. The investment firm had previously caused a brief market panic when it lost more than $10 billion in a matter of days last year. The lawsuit was filed against the firm on Tuesday in Federal District Court in Manhattan. Tech stock analyst Brendan Sullivan joined Archegos in 2014 and resigned shortly after it blew up.

Sullivan says he lost $50 million, as part of a $500 million deferred employee compensation plan that evaporated along with Archegos’s other assets when its highly leveraged options strategy failed. The lawsuit seeks to force Mr. Hwang to cover the losses. Meanwhile, Mr. Hwang was charged with fraud this year after suspicion of misleading lenders and market manipulation. 

According to the lawsuit, fund employees were told that the deferred pay plan was guaranteed and that it was invested in highly liquid stocks. But the lawsuit states that both these claims were false. It says employees were forced to contribute at least 25% of their annual bonus to the plan and declare how much they would defer before they knew the details of the bonus. 

Source: The New York Times