8/5/2011
In a court battle that is expected to be closely monitored by the financial sector, TCW Group, a Los Angeles money management giant, is filing a lawsuit against Jeffrey Gundlach, TCW’s former chief investment officer. TCW alleged that Gundlach and his aides connived to steal huge amounts of TCW proprietary information back in 2009 to establish a rival firm.
A star bond fund manager, Gundlach has denied the allegations of TCW and has also filed a countersuit. The 51-year-old math virtuoso is charging his former employer of discharging him to cheat him out of a big chunk of promised income.
The civil case, which is slated to begin Monday in the Los Angeles County Superior Court and would take at least 5 weeks to finish, has a lot of the ingredients of a Shakespearean tragedy, such as, betrayal and revenge, frustrated ambition and a hero’s fall from grace.
The trial will oblige a jury to determine which of the two very well-heeled parties is not telling the truth and should hand out to the other hundreds of millions of dollars in damages.
Also included as potential spoils in the case is the $13 billion in assets that Gundlach has managed to attract in only 19 months on his own.
A huge portion of that money came from financial advisors and individual investors who were prepared to gamble on Gundlach’s new mutual funds despite the legal onslaught unleashed by TCW against him. This includes allegations that he was in possession of hard-core pornography in his offices at TCW.
