TCW Scandal: Firm Files Lawsuit Against Gundlach's New Firm
Update: The LA Times adds that according to the suit, on the day TCW fired him, the firm found “inappropriate contraband” in his offices, “consisting of marijuana, drug paraphernalia . . . and a collection of 12 sexual devices, 34 hardcore pornographic magazines and 36 hardcore sexually explicit DVDs and videocassettes.”
Things are getting nasty out west. Is Gundlach the next Aleynikov?
January 7, 2010
Dear Valued Clients,
I am writing to inform you that today TCW filed a lawsuit against certain former members of its previous fixed income portfolio management team, as well as their new company, DoubleLine Capital Group LLC.
The charges in the complaint are serious, disturbing and specific, and confirm TCW's reasons for relieving Jeffrey Gundlach, and his colleagues Cris Santa Ana, Barbara VanEvery and Jeffrey Mayberry of their duties. There is no reason to recount these charges here, but they clearly support TCW's conclusion that members of TCW's previous fixed income portfolio management team engaged in a pattern of breaches of fiduciary duty and other unlawful activity, which threatened TCW¹s business and reputation. Specifically, and among other things, TCW learned that persons close to Mr. Gundlach, now involved with DoubleLine, systematically downloaded very large volumes of TCW proprietary information over a period of weeks before Mr.Gundlach's termination.
More recently, TCW has been the object of a campaign of malicious public misrepresentations about the facts and circumstances surrounding the changes in TCW's fixed income portfolio management team announced December 4, 2009.
These misrepresentations called into question TCW's standing and reputation in the industry. For all these reasons, TCW concluded that it had no choice but to file suit.
We do not intend to involve you, our investors, in this matter. We hope that we can continue to serve you and the rest of our clients for many years to come. To this end, we believe that the enhanced fixed income team, drawing from both longstanding TCW resources, as well as those from MetWest, is well positioned to provide the returns and service you expect.
Marc I. Stern
Chief Executive Officer
The TCW Group, Inc.