One of the hedge fund industry's longest-running compensation disputes is heading back to court, with former Touradji Capital traders Gentry Beach and Robert Vollero seeking as much as $165m in damages and accrued interest, according to a report by Business Insider.
The dispute dates back to December 2008, when Beach sued Touradji Capital over compensation he said he was owed under an agreement with the hedge fund's founder, Paul Touradji. Vollero subsequently joined the lawsuit in early 2009.
The former traders allege that Touradji had verbally promised them a fixed share of the profits generated by their trading strategies. They initially sought about $60m in compensation.
Touradji, whose firm has since been wound down, has disputed that claim, maintaining that compensation at the hedge fund was discretionary rather than governed by a fixed profit-sharing arrangement.
Almost 18 years after the original lawsuit was filed, the dispute is due to return to trial later this month. The amount at stake has grown substantially as a result of interest accumulated over the intervening years, with the total claim now estimated at about $165m.
At a virtual pretrial hearing this week, lawyers for both sides acknowledged the extraordinary length of the litigation and the difficulties involved in revisiting events that took place before the global financial crisis.
Touradji's lawyer, Andrew Clubok of Latham & Watkins, highlighted the challenges of relying on witness recollections nearly two decades after the alleged conversations took place. The case centres in large part on the existence and terms of an oral agreement.
Evidence has previously been heard from Beach, Vollero and Touradji, while other figures from the hedge fund industry have also provided testimony. They include Todd Kantor, founder of Encompass Capital Advisors and a former Touradji employee, and Josh Goldstein, chief operating officer of Verition Capital Management, who worked at a competing firm during the period at issue.
The traders previously appeared to have secured a victory in 2019, when a jury found that they had valid oral agreements with Touradji and awarded them $45m, plus interest, against their original $60m claim.
That award was subsequently overturned in 2020 by the First Department appellate division of the New York Supreme Court, which cited problems involving evidence and discovery.
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