Former Employee Seeks Over $150 Million in Damages from Daniel Och, Och-Ziff and Affiliated Management Entities for Alleged Improper Termination

Many hedge fund managers incentivize key investment professionals and other employees to remain loyal to the firm by giving them either a profits or equity interest in the firm’s management entities.  See “Key Considerations for Hedge Fund Managers in Developing a Succession Plan (Part Two of Two),” Hedge Fund Law Report, Vol. 5, No. 8 (Feb. 23, 2012).  However, such marriages do not always end well, as demonstrated by a recent action brought by a former Och-Ziff employee against Daniel Och, Och-Ziff and affiliated management entities.  The facts alleged in the Complaint offer a rare glimpse into ownership and compensation structures at one of the world’s largest hedge fund management companies.  This article summarizes the factual and legal allegations in the Complaint.  This article also contains a link to the Complaint, which is publicly available but difficult to obtain.  For further insight into a high-level compensation arrangement (and dispute) at a successful hedge fund management company, see “Dispute between Structured Portfolio Management and Jeffrey Kong Offers a Rare Glimpse into the Compensation Arrangements between a Top-Performing Hedge Fund Management Company and a Star Portfolio Manager,” Hedge Fund Law Report, Vol. 4, No. 8 (Mar. 4, 2011).

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