Friday, 30 January 2015
Last updated 13 hours ago
Apr 24 2014 | 10:20am ET
Two bank founders have sued a New York hedge fund manager for allegedly defaming them and causing their firing.
Milton Jones and Walter Davis said that 3-Sigma Value Investment Management’s Benjamin Weinger made racially derogatory comments about them in a letter to investors. The two, CertusBank’s former chairman and CEO, respectively, said the hedge fund manager acted in cahoots with Certus’ board “to create a humiliating image of the plaintiffs as African-American spendthrifts,” leading to their ouster two weeks ago. Angela Webb, the bank’s former president, we also fired.
Jones and Davis set up Certus in 2010, buying up five southern banks that had failed during the financial crisis. They built a new headquarters for the bank in Greenville, N.C., that opened last year.
But Weinger questioned why the bank, which has lost more than $84 million over the past two years, would spend $30 million on a lavish new home, which includes a theater and the tallest multi-touch media wall in the country. He also blasted the three executives for spending nearly $2 million on private jets and corporate condominiums for themselves.
“More than $100 million in equity capital has been erased in the most baseless and irresponsible way—by spending exorbitantly on personal excess masked as corporate expense,” Weinger wrote to Certus investors. That letter was part of a “campaign of misinformation and half-truths” by Weinger to convince the bank’s board to fire the three executives.
Jones and Davis also named the bank in their lawsuit. Neither of the plaintiffs has responded.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…