Diamond Lake Founder Hit With Third Compensation Lawsuit

Apr 27 2011 | 1:14pm ET

A third former employee has sued the founder of stillborn hedge fund Diamond Lake Investment Group, seeking unpaid wages.

Namuk Cho, the former head of U.S. derivatives trading at UBS, filed suit against Dow Kim, seeking the $2 million he claims the former Merrill Lynch trading chief promised him when he lured Cho to Diamond Lake.

"Kim specifically promised Cho $2 million as minimum compensation for his 2007 services," the suit alleges. "Cho insisted that his $2 million minimum compensation be unconditional and not subject to the launch of Kim's investment funds."

Those launches never happened; Kim pulled the plug on Diamond Lake in 2008 after seeing commitments of as much as $2 billion disappear. But Cho claims that he promised in August 2007, "you will get your $2 million" after complaining that the Cho's terms would mean "it comes out of my pocket."

Kim still faces two other lawsuits: Last month, a court reinstated claims made by former Diamond Lake general counsel Karl Wachter over unpaid compensation. And on Friday, lawyers for Kim and former Diamond Lake portfolio manager Michael Pasternak are to talk settlement. Pasternak is demanding $12 million in lost compensation from a job at Morgan Stanley he turned down to join Diamond Lake.


In Depth

Q&A: Fund Administration Comes To The Cloud

Jul 14 2017 | 7:23pm ET

The fund administration sector has been steadily implementing new technology, such...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Rastegar: PE Real Estate Gains Momentum as Uncertainty Rises

Jul 21 2017 | 6:04pm ET

The steady march of equity markets and fundamental shift in the direction of Fed...

 

From the current issue of