Hedge Fund Manager's Malpractice Suit Against Law Firm Dismissed Again

Aug 5 2011 | 12:29pm ET

A hedge fund manager's law firm isn't responsible for the bad decisions he made that led to a $20 million judgment against him in favor of his former employer.

A New York State appeals court in Manhattan rejected Russel Bernard's claim that Proskauer Rose gave him bad advice during his departure from Oaktree Capital Management that ended in a $20 million arbitration award against him. Bernard's lawsuit against the law firm was dismissed by a lower court last year.

Bernard's problems, according to the arbitrator, were entirely of his own making. It ruled that Bernard's misappropriation of real-estate opportunities he worked on at Oaktree for his own planned firm constituted "gross negligence" and "willful misconduct" that he failed to tell Proskauer about.

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