Former D.E. Shaw Manager Wins $52 Million Defamation Award After Being Fired For “Offensive Conduct” In 2018
A veteran former D.E. Shaw & Co. fund manager won $52.1 million from his old firm this week after a FINRA arbitration about whether or not he was defamed when he was fired in 2018 for “offensive conduct”.
The amount is one of the largest of its kind in recent memory.
The manager, Daniel Michalow, originally had sought $600 million from the firm. In addition to the firm, the case also targeted four top executives – all of whom declined to comment on the award, according to a mid-week Bloomberg wrap up of the story.
A firm spokesperson said of the award: “We were disappointed by the outcome of the arbitration, and we stand by the decision we made in 2018 to terminate Mr. Michalow’s employment with the firm.”
The firm had accused Michalow of “gross violations of our standards and values” back in 2018 and said that complaints about his “abusive and offensive conduct” in turn triggered a company-led investigation. This investigation led to Michalow’s firing.
Michalow wrote to company founder David Shaw afterward, calling himself a “scapegoat with a proverbial hanging in the town square”. He admitted that he “hugged colleagues in parting” and made “inappropriate jokes,” but said he didn’t discriminate, nor did he “go around touching people inappropriately”.
“While I was surely an abrasive boss and perhaps deserved to be fired for my style, there is no basis for the whisper campaign about anything sexual,” he wrote, according to the Bloomberg wrap up.
The arbitration panel eventually found that he “did not commit sexual misconduct.”
One lawyer who specializes in arbitration said the award was “freaking massive”, and went on to say if “you get $1 million [in arbitration], you’re an outlier for that year.”
Michalow’s original letter to Shaw can be read here:
This is the letter D. E. Shaw spent all day trying to make sure you couldn’t readhttps://t.co/I7lecZlNTY
— Daniel Michalow (@DanielMichalow) May 7, 2018
Sun, 07/03/2022 – 11:09