Brevan Howard Co-Founder Sues Firm to Invalidate Non-Compete Provisions in Partnership Agreement

In another example of a messy divorce of a hedge fund principal from the firm he helped to found, Christopher Charles Rokos, formerly of U.K. hedge fund giant Brevan Howard, has filed a declaratory judgment action in the Royal Court of Jersey, Samedi Division, seeking to invalidate the non-compete provisions contained in a Brevan Howard partnership agreement to which Rokos was a party.  Rokos desires to start a new fund.  As is common in non-compete disputes, Rokos alleges that the restrictions, which run until 2018, are unreasonably long in duration and overbroad in substance, and constitute an unenforceable restraint of trade.  Brevan Howard has filed an answer seeking to uphold the non-compete provisions and has asserted a counterclaim against Rokos.  For discussion of another dispute that arose after a fund alumnus started a competing fund, see “Delaware Chancery Court, Criticizing Both Sides in Contentious Litigation, Awards $4.662 Million to Camulos Capital Hedge Fund Founder in Payment for His Fund Interest,” Hedge Fund Law Report, Vol. 5, No. 38 (Oct. 4, 2012).  Other disputes among hedge fund principals that have gone to litigation have involved, or have arisen because of, ownership of intellectual property, misuse of proprietary or confidential information, sloppy documentation of payments and sloppy drafting of governing documents.

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