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Ex-Archego employee sues for millions in lost pay, citing “toxic” culture



(Reuters) – A former CEO of Archegos Capital Management LP has sued the private investment firm and its accused founder Bill Hwang, claiming a loss of tens of millions of dollars when the company collapsed, causing huge losses for the banks.

In a lawsuit filed Tuesday in Manhattan’s federal court, Brendan Sullivan said he was cheated of as much as $ 50 million after Archegos demanded that he and colleagues put at least 25% of their bonuses into their deferred compensation plan.

Sullivan said the plan lost $ 500 million when the company collapsed in March 2021, despite Archego’s promise that money would be safely invested only in highly liquid stocks.

He said participation was effectively forced by requiring employees to decide how much to postpone before Hwang awarded bonuses. He said Hwang presided over a “toxic culture”

; and demanded unwavering loyalty while running Archegos as a “personal forerunner.”

– The message was crystal clear. No contribution. No bonus, ”says Sullivan, a specialist in technology and media companies.

Lawrence Lustberg, lawyer for Mr. Hwang, declined to comment. Archegos’ lawyers did not immediately respond to requests for comment.

Archegos once had $ 36 billion in assets. It imploded when it became short after making large investments in equities including ViacomCBS through securities called total return swaps.

The resulting fire in shares caused about $ 10 billion in losses to banks, primarily Credit Suisse Group AG and Nomura Holdings Inc.


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