Hedge Fund, Ex-Employee Drop Claims in Sexual Harassment Suit, Embezzlement Countersuit
Snow Park Capital Partners has reached an agreement with the ex-CFO who accused her boss of sexual assault. Snow Park, in turn, claimed she stole thousands of dollars from the firm. Both claims have been withdrawn.
Sexual harassment claims against a New York hedge fund executive were withdrawn this week after the hedge fund filed a countersuit accusing the alleged victim of embezzling thousands of dollars.
Snow Park Capital Partners, a New York-based hedge fund, announced Wednesday that it had ended litigation with former chief financial officer Kate Merli, who had filed a lawsuit in May accusing fund CEO Jeffrey Pierce of sexual assault, gender discrimination, and defamation. In response, the hedge fund firm had countersued a month later, alleging that Merli had made fictional harassment claims in an attempt to cover up a breach of fiduciary duty and misappropriation of trade information.
The agreement announced Wednesday withdraws both claims, which cannot be refiled, with Merli barred from further discussing her allegations against Pierce and his firm. Snow Park said it did not give Merli money or any other benefits in the agreement.
“We believe the terms of the agreement, which are not confidential, should resolve any questions about the merit of Ms. Merli’s allegations,” the hedge fund stated.
Merli had first joined Snow Park in October 2016 as chief financial officer, a role that reported directly to Pierce. Two months later, Merli attended a company party where Pierce allegedly made “lewd and improper remarks” toward her, “sexually assaulted [Merli] by groping and touching” her, and “attempted to force [Merli] to kiss Pierce,” according to the court documents.
The next day at work, Merli claimed Pierce brought up his “sexual comments” from the night before, stating that he “did not regret having made those comments,” according to the documents, because “’it was true’” that Merli was “’hot.’”
Merli’s lawsuit also described an incident in July 2017, when Pierce allegedly propositioned Merli and “groped” her after a work dinner. According to the complaint, Merli began recording Pierce on her cell phone in an attempt to document his behavior. When he realized she was recording him, Pierce “became enraged,” according to the lawsuit, allegedly “tackling her to the ground and attempting to wrestle the phone away.” Merli “relented and deleted the recording,” the complaint stated. She alleged that she reported the incident to New York City police.
According to the suit, Pierce’s sexual advances and inappropriate comments continued after the July incident. Merli claimed that she threatened to go public about his conduct, but that Pierce “threatened [Merli], stating that if she did so, no company would hire [her] again” and “it would ruin her professional reputation.” Merli alleged that Pierce further promised to “draw out and prolong any legal battle so that she could not afford counsel to pursue any action.”
The final straw for Merli, according to her suit, was in December 2017, when Pierce “demanded that he be given the Snow Park company checkbook so he could write checks in the total amount of $7,850” for Christmas tips to the staff at his apartment building. Merli claimed that she protested and Pierce “proceeded to berate and belittle [her] in front of the entire office, and made comments impugning her integrity and abilities as CFO.” She said she did not return to Snow Park’s offices afterward.
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Pierce’s countersuit tells a different story entirely.
“Merli filed this lawsuit asserting fictional sexual harassment claims as a public-relations ploy designed to shield her from accountability for her crimes and to preemptively discredit the Snow Park Parties’ legitimate claims against her,” Snow Park alleged.
According to the countersuit, Merli “exploited her position as chief financial officer to benefit herself financially at Snow Park’s expense by... charging personal expenses to her corporate credit card and writing herself checks drawn from Snow Park’s account” totaling nearly $15,000. The court documents included photocopies of the checks and stills of security camera footage that allegedly show Merli entering the office late at night to take the checkbook containing the record of her alleged theft.
The hedge fund further claimed that Merli deleted company data and sent personal e-mails containing “confidential, proprietary, and/or trade secret information.” A notarized affidavit viewed by Institutional Investor showed that Merli admitted to having possessed Snow Park files and data, including documents regarding corporate expenses. The affidavit, dated July 19, also included an admission from Merli that she shared Snow Park files with two acquaintances and three colleagues at her current employer. All files have since been returned to Snow Park, with any copies deleted or destroyed, according to the affidavit.
Merli did not return an email seeking comment.