TCW Sues Ex-CIO, Alleges Drug Use And Cites Porno Collection

Jan 11 2010 | 1:51am ET

TCW Group has sued its former chief investment officer and three other former employees for allegedly trying to steal the Los Angeles-based traditional and alternative asset management firm’s clients and proprietary information. But that is only the beginning.

In its lawsuit, filed last week, TCW accuses Jeffrey Gundlach, who it fired last month, and his new firm, DoubleLine, breach of contract and fiduciary duty, unfair competition and conspiracy, among other allegations. According to the complaint, “DoubleLine is entirely the product of defendant’s theft of TCW property, fraud and breach of fiduciary duty.”

TCW claims that Gundlach, Barbara VanEvery, Cris Santa Ana and Jeffrey Mayberry founded DoubleLine in October while all still worked for TCW.

“That groundwork included wholesale theft of vast quantities of TCW proprietary information, including essentially all the information that would be needed to start the business,” the complaint alleges.

TCW fired Gundlach on Dec. 4 after he allegedly “threatened to leave TCW and take key personnel with him,” TCW CEO Marc Stern said. Gundlach has denied those allegations.

Just 10 days after being terminated, DoubleLine issued a press release announcing its formation and partnership with hedge fund firm Oaktree Capital Management. Oaktree, founded in 1995 by former TCW executives as part of another messy breakup, took a minority stake in Los Angeles-based DoubleLine—Gundlach is its largest shareholder—which plans to manage core and mortgage-backed fixed-income funds.

Of course, no indignant lawsuit would be complete without a little character assassination, and TCW’s is no different. The complaint alleges that “Gundlach’s unfitness to continue as a TCW officer was strongly corroborated by discoveries TCW made the day that it relieved him of employment duties.”

According to TCW, those discoveries included marijuana and drug paraphernalia—some of it “bearing evidence of recent use”—and a whole host of sexually explicit materials, including 34 “hardcore” pornographic magazine and 36 DVDs and videotapes of the same ilk. The firm also said it found “a collection of 12 sexual devices.”


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Controlling With Confidence: A ‘How-To’ For Hedge Fund Managers

Dec 22 2014 | 11:52am ET

Hedge funds are increasingly turning to third party services to help with operations...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.