Bill Gross the “Bond King” has filed suit against PIMCO, the giant $1.6 trillion asset manager he co-founded in 1971.
Gross left the company last September amid reports that the Newport Beach, Calif.-based firm was preparing to fire him before open mutiny broke out in the firm’s top leadership ranks over his volatile, un-collegial …
According to the complaint, Gross fell victim to “a cabal” of young, hotshot, risk-taking PIMCO executives who wanted a larger share of the company’s profits. The filing paints Gross as the honest defender of PIMCO investors, a bulwark against greedy PIMCO executives looking to squeeze more money out of investors’ accounts.
“Their improper, dishonest, and unethical behavior must now be exposed,” the lawsuit proclaims.
the suit is designed to force PIMCO to pay Gross the $200 million unpaid balance of the 2014 bonus he says he’s owed and to compensate him for hundreds of millions in stock options and equity grants whose vesting was contingent upon his continued employment. Gross argues PIMCO breached a written contract by forcing him out and that this unlawful action was motivated by the greed of the remaining executives who wanted to divide his share between themselves.
The lawsuit reads:
“Far from resolving the divergence between Mr. Gross and El-Erian’s view of PIMCO’s direction, unexpectedly — at least to Mr. Gross — this proposal prompted El-Erian to take a step that was far more drastic and damaging to both PIMCO and its investor clients. El-Erian, even though he was co-chief Investment officer and chief executive officer of PIMCO, was angry and apprehensive at the idea that he would have to bear sole responsibility (and blame) for the high-risk, high-fee investments he had expanded PIMCO into while Mr. Gross would focus his own efforts on PIMCO’s historical bond business.”
In a statement to the Wall Street Journal in February, Gross said “For more than 40 years, PIMCO has delivered superior results for our clients, consistently and during periods of extraordinary market volatility. We hold ourselves to the highest standards of excellence and performance, and I ask of others only what I demand of myself: hard work, dedication and intense focus on putting our clients first.”
The lawsuit was filed on behalf of Bill Gross by lawyers from Glaser, Weil, Fink, Howard, Avchen & Shapiro LLP.