Traders are taking legal action against their previous employers, claiming that they withheld bonuses linked to performance.
Robert Gagrialdi, a specialist in block trading, known as “Gag,” allegedly acted in bad faith by not issuing a $7.5 million bonus, despite generating over $60 million for the company from April 2021 to March 2022.
During a court hearing in London, Gagrialdi recounted his interaction with fund founder Michael Larch in 2022 when he asked about the bonus. Larch reportedly responded, “I am not going to pay you a bonus, F-K, sue me.”
Gagrialdi has been pursuing claims for breach of contract and noted that a $10 million return was understood to be a “good result” back in early 2021.
He mentioned that Zoltan Varga, a prominent investor, acknowledged his ability to generate profits, saying, “You have to give it to the gag. A man can certainly make money!”
Evolution, Gagrialdi’s employer, asserted that it had the discretion not to award the bonus, alleging that he violated employment terms.
Additionally, they accused the traders of having a poor attitude towards senior management.
Evolution stated that Gagrialdi’s lack of a bonus was due to his “generally difficult attitude,” but the situation reportedly worsened after an investigation by the US Department of Justice became public.
Before his brief tenure at Evolution, which lasted just 11 months, Gagrialdi worked for Segantii Capital Management.
His contract came under examination during the exchange committee’s inquiry into Morgan Stanley, linked to a larger criminal investigation as well as scrutiny from the SEC.
Last year, Morgan Stanley agreed to pay $249 million to settle claims related to over $100 million in illicit profits tied to actions by Pawan Passi, the former head of the bank’s US equity syndicate desk.
In a previous legal filing, Evolution suggested that Gagrialdi referred to Passi as “daddy” and that he was “F-game on block trading.”
Passi faced a SEC order to pay a civil penalty of $250,000.
Gagrialdi has distanced himself from the allegations surrounding the DOJ case, repeatedly denying any inappropriate relationship with Passi.
Evolution has contested the $7 million Gagrialdi received during his short time at the hedge fund, alleging that his close ties to Passi breached trust.
They informed Gagrialdi that his contract was terminated in February 2022.
Segantii, Gagrialdi’s former employer, ranked among Asia’s largest funds, managing nearly $5 billion in assets.
Last year, the firm revealed to investors that the Hong Kong Securities Commission was pursuing criminal charges against it and several individuals for insider trading.
Segantii and two employees connected to the case have pleaded not guilty.
