Ex-Zwirn CFO Sues Firm Founder For Defamation

Jul 21 2009 | 7:04am ET

A former top executive at defunct hedge fund shop D.B. Zwirn & Co. says he got a bad rap and a bum I.O.U. from firm namesake Daniel Zwirn.

Perry Gruss filed suit against Zwirn, who turned over what was left in his hedge funds to Fortress Investment Group in May, accusing him of defamation and breach of contract. The suit alleges that Zwirn made Gruss a “scapegoat” for the purchase of a private jet with investor money without their knowledge, and says that Zwirn’s statements have kept Gruss from finding a new job since his “forced exit” from D.B. Zwirn three years ago.

According to the lawsuit, Zwirn told Gruss that he had to go so that the firm’s namesake could remain “pearly white” and “bullet-proof.”

“With Gruss out of the way, investors were told a series of false and misleading statements which sought to blame Gruss for any conceivable control issues at the company, and to shift the blame to Gruss without implicating Zwirn,” the suit, filed in Manhattan federal court, alleges.

Gruss also claims that Zwirn failed to make good on payments “in connection with his forced exit” from the New York-based firm, which shuttered its largest hedge funds last year.

Gruss is seeking $9.6 million in damages.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...