Hedge Fund Billionaire Dan Och is sued by one of his former traders for $150M. Arnaud Achache made a ton of money trading for Och but I guess he wants a little (make that a lot) more. Achache is suing Och for $150M for wrongful termination. He claims that Och systematically began eliminating the junior partners of the firm so that he (Och) could keep more of the proceeds from the firm’s pending IPO for himself.
An article on Forbes lays out all the juicy details including:
For years it appears, Achache made lots of money at Och-Ziff. Achache claims he received a 1% ownership interest in the hedge fund firm after he became a non-managing member in 2005, which was used to calculate his share of the incentive and management fees generated by the firm. The lawsuit says Achache’s interest was cut to 0.962% in 2007, but Achache was still making plenty of money over and above his share of the fees—when Och-Ziff borrowed $750 million to finance a $720 million dividend in 2007, Achache got $257,000. The lawsuit suggests Achache got around $19 million from the IPO proceeds and claims he got $4 million less than he would have received had his ownership interest not been reduced.
Achache does not explain in his lawsuit why he waited three years to file a complaint against Och.
When it comes to the top hedge funds, massive law suits are almost par for the course. When big egos are involved and even bigger amounts of money are in play, you can bet that things will get exciting.