D.E. Shaw fired a high-profile hedge fund manager after an investigation into alleged inappropriate behavior, and now he's fighting back
- Daniel Michalow, a senior portfolio manager at D.E. Shaw, was fired from the $50 billion hedge fund in March following an investigation into inappropriate behavior, people familiar with the matter said.
- Several women came forward with complaints about Michalow's behavior, people familiar with the matter said.
- Michalow is fighting back a la "Jerry Maguire," and sent a letter to the fund's founder, David Shaw, on Monday.
- As he alleges in the letter, Michalow believes his termination was unfair and that he is a scapegoat for the #MeToo movement.
- Business Insider obtained a copy of the letter.
A longtime D.E. Shaw portfolio manager says he was unfairly terminated after an investigation into allegations of inappropriate behavior. Now he is fighting back.
D.E. Shaw fired Daniel Michalow, a senior portfolio manager in the firm's discretionary macro group, after the $50 billion fund conducted an investigation into the high profile portfolio manager in March. The investigation was sparked after Michalow allegedly said that one of the requirements for hiring a new assistant was someone that he could "call sugar tits," people familiar with the matter told Business Insider.
The firm's human resources department launched a formal investigation where several women came forward with complaints about his behavior, the people said. Michalow was then temporarily suspended before his firing.
Michalow maintains that the remarks that launched the initial investigation were a joke and that he was quoting actor Mel Gibson, according to a person close to Michalow. Gibson infamously used similar language with a female cop when he was arrested in 2006 for driving under the influence, TMZ reported at the time.
A representative from D.E. Shaw said:
"Daniel Michalow engaged in gross violations of our standards and values. During the course of a recent investigation prompted by an employee complaint, a number of other employees came forward to report his abusive and offensive conduct. His employment was swiftly terminated. Now, rather than accept responsibility for his behavior, Daniel has chosen to smear his former colleagues and to paint a wildly inaccurate picture of the firm. Over the course of the past few days, Daniel has tried to coerce us into issuing a misleading statement to the media regarding his behavior. We have refused to do so, and instead are taking this opportunity to set the record straight. We are proud of the supportive and inclusive culture we have built at the firm."
Michalow penned a five-page letter to firm founder David Shaw on May 7 which was obtained by Business Insider. Michalow confirmed to BI via email that he had sent the letter to Shaw, but declined to comment further on his departure from the firm.
In the letter, Michalow says that "while I was surely an abrasive boss and perhaps deserved to be fired for my style, there is no basis for the whisper campaign about anything sexual." He explains that his understanding is that the allegations against him were not about physical acts and that he believes he was unfairly scapegoated because of the #MeToo movement.
Michalow made allegations that during his time at D.E. Shaw, after hours some co-workers visited strip clubs and risque nightclubs where women danced topless.
He acknowledges that he could be difficult to work with but that "should not be twisted into a basis for creating bigger issues that don't represent reality or who I am. Investing a false #metoo narrative about me is insane because everyone knows I didn't go around touching people inappropriately or discriminating again anyone."
Michalow was a longtime senior employee at D.E. Shaw who worked at the firm for 14 years.
Michalow's termination and letter come in the wake of the #MeToo movement, in which women have spoken out against workplace harassment, filed lawsuits against gender discrimination, and spoken on-the-record to media about the misconduct of powerful men, from Harvey Weinstein to Charlie Rose. Some allegations have put an end to offenders' careers.
Wall Street has had comparably few high-profile cases than industries such as media, politics and Hollywood.
Michalow's stance is not unprecedented, however.
Earlier this year, Bank of America Merill Lynch fired executive Omeed Malik amid sexual harassment allegations. Malik now plans to sue the bank for $100 million for defamation.
Contact the reporters: Olivia Oran and Rachael Levy.