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Trader Wins £4.5M Bonus After Boss Said "Sue Me"
8 Dec
Summary
- Trader generated 97% of profits but was denied a £4.5 million bonus.
- Hedge fund boss told trader to sue him for the owed bonus.
- Court ordered the hedge fund to pay the bonus plus interest.
A High Court judge has ordered Evolution Capital Management (ECM) to pay a star trader, Robert Gagliardi, his £4.5 million bonus after the hedge fund's boss, Michael Lerch, initially refused. Lerch had controversially told Gagliardi to "sue me" when asked for the payout, despite Gagliardi generating 97% of ECM's profits in 2022.
The court found Lerch's decision to withhold the bonus, based on irrelevant considerations of a US market-abuse probe that resulted in no charges, was an unlawful exercise of discretion. Mr. Justice Carver ruled that the maximum bonus percentage should be awarded, potentially increasing the total payment with interest to £6 million.
During proceedings, Lerch's aggressive counterclaim against Gagliardi was dismissed as "embarrassing" and unsupported by evidence, with the judge noting Gagliardi was considered a "money-making machine." The firm is also likely to bear most of Gagliardi's £2 million in court costs.
