(Repeats story that ran on Wednesday with no change to
headline or text)
By Joseph A. Giannone
NEW YORK Nov 4 Hedge fund firm Touradji Capital
Management on Wednesday countersued Robert Vollero and Gentry
Beach, two former employees who claim they are owed $50 million in
unpaid bonuses, accusing the two men of lying about their
abilities, stealing secrets and defaming the firm.
Beach sued Touradji in December last year, and was joined by
Vollero in January, accusing the firm of breaking a 2005 oral
agreement to pay them a percentage of profits from certain funds.
Vollero and Beach, who launched their own firm this year, also
accused Touradji of making threats and causing emotional
Touradji Capital, the largest U.S. commodities hedge fund, was
founded by Paul Touradji, one of several "Tiger Cubs" spawned from
legendary investor Julian Robertson's Tiger Management fund.
A New York state court on Sept. 18 dismissed all but two
complaints against Touradji: a claim for breach of contract and a
claim for inflicting emotional distress.
But for the first time in nearly a year, Touradji has publicly
responded to a series of allegations made by the former employees
and landed a few punches of its own. Touradji seeks more than $250
million as compensation for financial and reputational damage.
The two men "were responsible for the destruction of millions
of dollars of investor capital through a pattern of fraud,
breaches of fiduciary duty, mismanagement and utter disregard for
the interests of the investors whose capital they were obligated
to protect," Touradji said in its suit.
The lawsuit and publicity surrounding Vollero and Beach's
breach of contract claims have hurt Touradji's business, prompting
some clients to withdraw assets and eclipsing what has otherwise
been a year of strong performance.
Touradji Capital declined to comment.
Vollero Beach Capital and its lawyers could not be reached for
comment. Gary Beach, Gentry Beach and Robert Vollero could not be
reached for comment.
The scathing 54-page lawsuit, filed in New York state court in
Manhattan, attacks the work performance and the veracity of
Vollero and Beach.
In the countersuit, Touradji Capital denies that Paul Touradji
ever promised a 15 percent cut of fund profits to Vollero and
Beach and said no compensation agreement was ever put in writing.
E-mails and other evidence, the firm said, indicate the two men
received millions of dollars in compensation and never
Touradji also contends that Vollero and Beach lied about their
work experience, claiming to have been money managers when they
held more junior roles as analysts.
Beach, the lawsuit states, also falsely claimed to be a key
money manager at Touradji while he launched his own firm, when he
had been demoted to analyst.
Touradji also lists a series of episodes where it said Beach
and Vollero failed in their roles as fund managers and on some
occasions generated disastrous losses.
In 2006, for example, Touradji said the two managed a
small-cap stock fund that suffered large losses because most of
the assets were highly illiquid. In another case, Beach led a
private equity business that generated a more than $100 million
writedown on one disastrous energy bet.
The suit also said Beach was not telling the truth when he
filed a police report complaining Touradji made threats and
accused his employer of vowing to "ruin" Beach's marriage.
Touradji's suit said Beach had an extramarital affair with a
student in Argentina.
Moreover, the firm said Beach and Vollero were not forced out
but were in fact secretly preparing to launch their own firm while
still on the payroll. Vollero, who remained at Touradji for three
months after Beach left, allegedly collected proprietary
information for their new firm, the suit said.
Touradji also accuses Gentry Beach's father, Gary Beach, of
mismanaging an oil and gas venture controlled by Touradji.
Touradji's suit says that the day before Gentry Beach left the
firm, the elder Beach stole $500,000 in cash from the venture.
Gary Beach is currently suing Touradji Capital in a Texas
state court alleging he, too, is owed millions in unpaid
compensation by Touradji.
The Touradji suit denies claims that it contributed to the
failure of Amaranth Group, a struggling hedge fund firm that in
September 2006 approached Touradji Capital to buy a base metals
Touradji Capital complained that Gentry Beach falsely accused
the firm of using inside information to trade against Amaranth and
accelerating its collapse. These claims of the firm breaking its
word spread at a time when Vollero and Beach worked to launch
their new firm, the suit said.
Touradji denied abusing the portfolio information and
complained that Vollero and Beach defamed the firm. Amaranth
recently filed preliminary legal action against Touradji Capital.
The case is Gentry Beach and Robert Vollero vs Touradji
Capital Management LP and Paul Touradji, New York Civil Supreme
(Reporting by Joseph A. Giannone; Editing by Phil Berlowitz)