A MILLIONAIR financier who runs in the same circles as A-list stars is locked in a bitter court battle after being sued for an “eye-watering” sum.
The looming court case threatens to reveal a high-rolling financial betrayal that would dwarf fictional scandals in the award-winning TV series Industry.
The case is due to start on October 6 at London’s High Court[/caption]
Simon Sadler, founder of Segantii Capital Management[/caption]
A multi-millionaire financier is being sued by a trader for the non-payment of a $7.5 million (£5.6 million) bonus for more than $70 million (£56 million) profit he generated in just five months.
The case, listed for 13 days in London’s High Court next month, could cost the warring parties around $7 million (£5.2 million) in court costs before any damages are decided.
The court battle seems straight from a high-octane episode of the TV drama Industry, which followed the switchback fortunes of traders who pursued profit with an adrenaline rush.
It will lift the lid on the high world of finance where profits and personal wealth guarantee access to celebrity-style lifestyles, exclusive beachfront homes, private jet travel and power.
Michael Lerch, a former university footballer who built a financial group in Japan, is being sued by successful trader Robert Gagliardi.
Gagliardi, known as Gags, alleged he was denied a huge bonus despite his stellar performance and an unblemished track record and career.
After he raised the non-payment issue multiple times, court papers allege that Lerch, the boss of investment firm Evolution Capital Management, also known as Evo, told the London-based trader: “I’m not going to pay you the bonus, f*** you, sue me.”
Gagliardi, an experienced portfolio manager specialising in buying and selling blocks of shares in major companies, was responsible for 97% of Evolution’s profits during his time with the company, court papers state.
His claim, initially launched in 2022, is the performance bonus was agreed but Lerch is counter-claiming it was discretionary so could be withheld.
The heavyweight showdown will shine a light on Lerch’s financial group, with a personal net worth estimated above $500 million.
It could also reveal an insight into his jet-set lifestyle and friendships with stars such as Flea from the rock band Red Hot Chilli Peppers.
Industry, which won BAFTAs and Royal Television Society Awards, depicted a trading environment where profit dominated and ruthless executives enjoyed lavish lifestyles while gleefully ruining the careers and lives of employees.
“The facts will rival the fiction when this gets to court,” said an observer.
“The sums are eye-watering and the personalities are off the scale.
“The financial world will be gripped by what happens in court.
“The whole inner workings and life style of traders will be laid bare.“
Gagliardi, branded “abrasive” by Lerch’s legal submissions, traded in Evolution’s London Office in Chelsea’s Fulham Road.
He used his extensive experience and contacts to navigate the turmoil of COVID by establishing a fund trading stock in huge companies such as Uber Norwegian Cruise Lines and Delta Airlines whose trading had been halted by lock downs.
His results were spectacular, exceeding a top target of $10 million (£7.5million) and court papers reveal that key investor and revenue share partner, Zoltan Varga, commented: “Gotta give it to Gags. Guy can sure make money.”
Lerch, who is on the board of an LA music charity with Flea and Anthony Kiedis from the Red Hot Chilli Peppers, built a financial empire in Japan after leaving Princeton University.
He also founded TORA, a US-headquartered cloud-based technology provider that supports customers trading multiple asset classes across global markets, in 2004, which was then acquired by the London Stock Exchange Group (LSEG) in 2022 for $325 million (£259 million).
Lerch is alleging the bonus was discretionary and withheld because of Gagliardi’s abrasive nature and that he was part of a far reaching US Securities and Exchange Commission investigation from which, Gagliardi was cleared.
Gagliardi’s skeleton argument papers state: “As for complaints regarding Mr Gagliardi’s behaviour: these are trumped-up post hoc excuses for Evo’s attempt to renege upon its obligations.
“Insofar as they relate to allegations of regulatory wrongdoing, Mr Gagliardi has been cleared following a thorough investigation by the US Securities and Exchange Commission.”
No one was ever charged.
Evo has historically been the subject of regulatory criticism and censure in Hong Kong where Evo’s CIO and Head of Trades Mr Robert Toresco was flagged for not disclosing his personal holding.
Meanwhile Evo’s Head of Trading, Mr Sumner Gerber was fined and suspended by a Japanese regulator while he was working for Evo, according to the skeleton argument.
It is speculated the character John Malcolm in Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions is based on Michael Lerch and his exploits in Japan in the 1990s as many of the events and timelines align.
Pre-trial documents also state that Lerch hired a team to taint Gagliardi’s reputation and that an attempt by Evolution to have the case heard in the US was struck out.
The court case is due to start on October 6.
Daniel La Rocca, former trader at Segantii Capital Management Ltd., left, and his solicitor[/caption]
Pawan Passi, former equities executive at Morgan Stanley, outside court[/caption]
