NEW YORK (Reuters) – The prominent U.S. hedge fund DE Shaw and four senior executives must pay $52.1 million to a former top money manager who accused the firm of defamation, an arbitration panel ruled.
Dan Michalow had been fired by DE Shaw in March 2018, which at the time accused him of committing “gross violations of our standards and values.”
But in a ruling issued on Wednesday, a Financial Industry Regulatory Authority (FINRA) arbitration panel found DE Shaw and its executives liable to Michalow for defamation, and found specifically that Michalow “did not commit sexual misconduct.”
Michalow’s termination came not long after the start of the #MeToo movement, where hundreds of rich and powerful men have been accused of sexual misdeeds. He has denied wrongdoing.
The arbitration panel also found four members of DE Shaw’s six-person executive committee jointly liable to Michalow: Eddie Fishman, Julius Gaudio, Max Stone and Eric Wepsic.
“We were disappointed by the outcome of the arbitration, and we stand by the decision we made in 2018 to terminate Mr. Michalow’s employment,” DE Shaw said in response to a request for comment on behalf of all defendants.
A lawyer for Michalow had no immediate comment.
DE Shaw is among Wall Street’s biggest hedge funds, and known for quantitative investing.
FINRA arbitration awards generally cannot be appealed. There are limited exceptions for awards tainted by fraud, misconduct or arbitrator bias, or awards that are completely irrational.
(Reporting by New York Newsroom; editing by Richard Pullin)
