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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note