Wednesday, 25 May 2016
Last updated 51 min ago
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.