Thursday, 25 August 2016
Last updated 12 hours ago
Jul 30 2010 | 11:47am ET
A London appeals court will allow a former New Star Asset Management hedge fund manager’s bullying lawsuit against his old firm to proceed.
Patrick Evershed filed a whistleblowing and unfair dismissal suit against New Star two years ago, claiming that firm founder John Duffield, who recruited him in 2002, “bullied” him into reopening his fund and that he was subjected to “humiliating conduct” by another New Star executive. When he complained about the treatment, he was suspended, Evershed alleges.
New Star—which has since been acquired by the Henderson Group—denies the charges. But the Court of Appeal rejected its bid to dismiss the whistleblowing charges, a potentially costly decision for the firm, as whistleblowing claims can include unlimited damages, while unfair dismissal claims are generally limited to just £65,000.
In his lawsuit, Evershed claims that Duffield forced him to reopen his New Start Select Opportunities Fund despite promises when he was hired that the fund would be capped at £50 million. Instead, the fund took in three times as much, and performance plummeted from consistent double-digit gains to double-digit losses.
Duffield “has been most vile to most of the fund managers for several years and bullying us,” Evershed wrote in his letter to the hedge fund’s human resources department. “In particular, he bullied me into reopening my fund. This destroyed the performance of the fund and my reputation.”
The founder also “created a most unpleasant atmosphere throughout the firm,” Evershed wrote. “He recruited stars and then destroyed them by the way he treated us.” Evershed added that the firm’s former chief investment officer also subjected him to “humiliating conduct.”
But instead of acting on those allegations, Evershed, who now works at Hargreave Hale, said that CEO Howard Covington suspended him.