Tuesday, 31 May 2016
Last updated 3 days ago
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.