The D.E. Shaw portfolio manager who says he's a #MeToo scapegoat plans to take legal action against the $50 billion hedge fund for defamation
- Daniel Michalow, a senior portfolio manager at D.E. Shaw, was fired from the $50 billion hedge fund in March following an investigation into claims of inappropriate behavior, Business Insider earlier reported.
- Michalow now says he plans to take legal action and file a FINRA statement of claim against the firm D.E. Shaw, claiming that the hedge fund's internal communications and comments to the media defamed him.
- Michalow plans to argue that D.E. Shaw should have stated publicly that he was not fired for misconduct. In addition, he plans to argue that D.E. Shaw should not have said that he violated the firm's values.
- Michalow's lawyer contests that he was fired for cause.
- D.E Shaw offered Michalow more than $10 million in compensation after his departure under conditions that he not sue the firm. D.E. Shaw continued to offer that amount after Michalow published his letter to the hedge fund's founder David Shaw on May 7.
- Michalow has rejected the money.
Things might be about to get heated in a dispute between $50 billion hedge fund D.E. Shaw and a fired portfolio manager.
Daniel Michalow, a former senior portfolio manager in the firm's discretionary macro group, plans to take legal action against his former employer next month, a person familiar with the matter said. Michalow plans to file a statement of claim in arbitration next month with the Financial Industry Regulatory Authority. Michalow plans to claim that the New York hedge fund, in its response to Michalow's termination, defamed him in internal and external communications and to the media.
On May 7, Business Insider reported that Michalow, a 14-year employee, had been fired following an investigation into claims of inappropriate behavior. Several women had come forward with complaints about Michalow, including that he allegedly said to a former assistant that one of the requirements for hiring a new assistant was someone that he could "call sugar tits." He also sent a letter to the hedge fund's founder David Shaw, lashing out about his firing and detailing his view of the company's culture, which he described as problematic.
"Inventing a false #metoo narrative about me is insane because everyone knows I didn't go around touching people inappropriately or discriminating again anyone," Michalow wrote in the letter.
Michalow now alleges that D.E. Shaw should have stated publicly that he was not fired for misconduct, according to the person familiar with the matter. Michalow also alleges that D.E. Shaw should not have said that he violated the firm's values. He plans to make these claims in a FINRA action.
"From day 1, my primary goal has been for David Shaw and his team to tell the truth and they have not," Michalow alleges in a statement to Business Insider.
Michalow's lawyer, John Singer, indicated that "any chance for an amicable resolution of this matter short of arbitration were eviscerated on May 7th." He added specific allegations that D.E. Shaw's remarks to the media "were wholly incongruous with a) the actual underlying facts, b) what the company had told employees internally and c) what the company had communicated externally to investors as well."
Singer contests that Michalow was fired for cause, and claims that Michalow's "separation from the company was treated as non-causal and there has never been any deviation from the same."
D.E. Shaw said: "The firm will defend itself against Mr. Michalow's meritless assertions in the appropriate forum."
D.E Shaw offered Michalow more than $10 million in compensation after his separation under conditions that he not sue the firm, the person close to the matter said. D.E. Shaw continued to offer that figure after Michalow published his letter to David Shaw on May 7, the person added. Michalow has rejected the offer.
D.E. Shaw declined to comment on the monetary offer and the conditions under which it was offered.