Photo: P Base
Hedge fund Och-Ziff is being sued by a jilted former employee who joined the hedge fund from Morgan Stanley in 2008, Bloomberg reports.Zain Fancy filed a suit against two Singapore-based units of the $28.7 billion hedge fund.
He alleges the firm is withholding $7.9 million in pay and stock ($1 million in wages; $6.9 million worth of shares) owed to him after he claims he was fired without grounds last October.
On the other side, Och-Ziff says that Fancy “acted in bad faith by not fully disclosing his involvement in a probe” that was being conducted by the SEC and DOJ into corruption at Morgan Stanley while he was an employee there.
When he joined Och-Ziff, Fancy was placed on a $500,000 a year salary and entitled to $35 million worth of restricted shares. He also got a $10 million signing bonus.
In a filing, Och-Ziff’s CFO said, via Bloomberg:
Mr. Fancy’s involvement in pending investigations, coupled with other factors unrelated to Och-Ziff, have prevented the parties from raising third-party capital for the venture and rendered the venture unworkable. His actions have resulted in a breach of trust.
No rational investor would commit capital in the face of uncertainty over the status of key team members. Any attempt to solicit capital without full and accurate disclosure as to the status of key members would have been reckless and perilous.
Fancy’s attorney has said, “These belated allegations are nothing more than a transparent attempt to renege on your clients’ clear contractual obligations.” They claim Fancy didn’t know he was under investigation either.
Fancy was head of Morgan Stanley’s real estate business in Asia. He joined Och-Ziff in 2008 as founding partner and executive managing director of the Och-Ziff Real Estate Singapore Pte fund. He’s suing that unit, as well as the Och-Ziff London, for breach of a partnership agreement.