The ongoing The TCW Group and Jeffrey Gundlach soap opera completed another episode yesterday when the money management firm filed suit against the bond pro and his new institution in Los Angeles Superior Court.
According to court documents, the California-based company is alleging that Gundlach, his new firm, DoubleLine Capital, and the employees he plucked from TCW, as breaching their fiduciary duty, which caused unfair competition and hurt TCW.
Additionally, the Jan. 7 complaint pointed to breach of confidence claims, interference with contractual relations and civil conspiracy.
TCW, a Societe Generale subsidiary, stated in the suit “the sudden appearance of this new entrant [DoubleLine] in the money management business” is “a product of defendants’ theft of TCW property, fraud and breach of fiduciary duty.”
“DoubleLine is not a testament to [Gundlach and DoubleLine’s] supposed acumen but the product of their secret theft,” TCW said in the complaint.
Back in September, TCW alleged that Gundlach “openly disparag(ed)” the firm and threatened “to leave and take key employees with him (which he has since done).” But at the time of his initial threats, and his Dec. 4 termination, the money manager alleged that Gundlach and his associates stole nearly nine million pages of proprietary information from TCW’s databases.
Roughly 10 days following his termination, Gundlach created his new fixed-income firm. And by the end of 2009, “nearly 40” persons jumped ship for DoubleLine last month, Erin Freeman, TCW spokesperson, told Investment Management Weekly previously.
Additionally, TCW pointed to Gundlach’s “erratic” behavior and recovered inappropriate contraband found in his office as additional reasons for his “unfitness to continue as a TCW officer,” the complaint said. Marijuana, drug paraphernalia and sexually explicit DVD’s and cassette tapes were discovered in his possession, the firm said.
In a statement made available late yesterday, DoubleLine Capital called the allegations “meritless.”
“TCW's lawsuit is a blatant attempt to damage DoubleLine’s business and clients. DoubleLine and Mr. Gundlach are asserting their legal rights in a lawsuit to be filed shortly, which will demonstrate the thoroughly baseless nature of TCW’s claims and seek redress for TCW's deplorable conduct,” the statement said.
Separately, DoubleLine called TCW’s personal attacks on Gundlach as being an obvious “gratuitous and irrelevant gutter tactic.”