The Morning Brief: Former BlueCrest Trader Sues for Bonus

Former BlueCrest Capital Management trader Nicholas O’Grady is suing the hedge fund firm, claiming the firm failed to pay him a $1.28 million bonus, according to a Forbes report. O’Grady was fired without cause, according to the report, citing a complaint filed in Manhattan’s New York state court this week. O’Grady, who previously worked at SAC Capital Advisors, claims he made BlueCrest an $8.625 million profit in five months last year and that his pay package included a $250,000 base salary plus an 18 percent commission on his personal performance, according to the report.

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London-based alternative investment manager Man Group announced plans to acquire the investment management business of NewSmith in a deal expected to close in the second quarter. NewSmith, with $1.2 billion in assets and offices in Tokyo and London, has four portfolio management teams and 15 investment professionals. It is 40 percent owned by Japanese institutional asset manager Sumitomo Mitusi Trust, with the remainder owned by founders and senior staff. Terms of the deal were not disclosed.

Man has been on an acquisition spree over the past year. In December the firm announced it acquired Silvermine Capital Management, a Stamford, Connecticut-based leveraged loan manager with $3.8 billion of funds under management. The firm also completed its acquisition of the $1 billion, Summit, New Jersey–based fund-of-funds firm Pine Grove Asset Management, a credit specialist, on August 1, and finalized the purchase of Boston-based quantitative equity manager Numeric Holdings in September.

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Alphonse “Buddy” Fletcher’s legal woes are piling up. The founder of the former Fletcher International hedge fund owes his former law firm $2.7 million in legal fees, a Manhattan judge found, according to a New York Post report. Fletcher is accused of fleecing public pension plans in Massachusetts and Louisiana out of more than $100 million, as well as failing to pay nearly $3 million in taxes. That’s on top of more than $140 million in court judgments and tax liens against Fletcher, who owns several apartments in the Dakota, the iconic Manhattan co-op apartment building, in addition to expensive homes in Connecticut and San Francisco, according to the report. Fletcher famously sued the Dakota for racial discrimination after it refused to sell him another apartment in the building. The Dakota contends that it refused the sale because of concerns regarding Fletcher’s finances, according to the Post report. Fletcher is accused of failing to pay his attorneys in the case, which is still pending.

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New York-based hedge fund firm Standard General, which first earned media notice after investing in controversial clothing retailer American Apparel last year, is in the news again for a bid to buy about half of RadioShack’s stores out of bankruptcy protection, according to a Wall Street Journal report. The firm, co-founded by former Och-Ziff Capital Management and Cyrus Capital distressed specialist Soohyung Kim, is looking to kick in $75 million toward a $200 million deal that would ostensibly trade a rescue loan made to the retailer last year for an ownership stake, according to the report. A spokesman for the fund told the paper in an e-mail that it looks to “unlock value in complex circumstances” and that it thinks “this investment has the potential to provide significant benefits to both RadioShack and Sprint.” Standard General, founded in 2007, manages about $1 billion, according to the report.

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