The Review — 28/11/2017 at 00:30

Fancy dress warning from hedge fund party



As Christmas party season approaches, it’s worth refreshing your memory of the worst investment banking Christmas parties past and ensuring the scenes therein are not repeated. In some cases, it may also be worth casting your mind back to the fancy dress office Halloween party.

Hedge fund Highland seemingly had one of the latter. And in a bizarre article on the firing of a star fund manager, the Wall Street Journal suggests Highland’s office Halloween party caused some confusion.

Star Highland portfolio manager Josh Terry was wrongly accused by his employer of sexual impropriety. An arbitration panel investigating Terry’s dismissal found the accusation was completely misguided and, “based solely on someone’s fantasy related to costumes they wore to an office Halloween party”.

If the costumes worn to Highland’s Halloween party engendered a “fantasy,” the entire case surrounding Terry’s dismissal from Highland is worthy of a bad dream. Terry claims to have been fired by Highland after opposing a plan to transfer funds between Highland investment vehicles and delay paying investors. He says Highland owes him $5.7m in compensation. In turn, Highland claimed it dismissed Terry after he acted against the interest of investors and had sexual relationships with subordinates.

The compensation case is ongoing, but an arbitration ruling found that Highland’s accusations against Terry were wrong. Firstly, the arbitrators said that he didn’t cause damage or loss to the fund Highland said he mismanaged. Secondly, they said that the allegations of sexual relationships were insignificant, unproven, or borne of fantasies relating to those Halloween costumes. The arbitrators have awarded Terry $7.9m in compensation, but Highland continues to contest the compensation claim in the courts. In a statement, Highland told the WSJ: “In this ongoing compensation dispute, Highland’s remaining claims regarding Josh Terry’s misconduct, including over a year of malicious taping of co-workers and counter-parties, will dwarf the arbitration award.”

Whatever the eventual outcome, it’s far simpler to attend office parties in black tie.



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