Ray Dalio, Bridgewater Associates' founder, defended top executive Greg Jensen from allegations of a personal relationship with a female employee, saying he's a "man of high character."
Dalio said in a statement issued Tuesday that "I would not have tolerated the pattern of behavior inaccurately described by the Wall Street Journal."
Colleen Schwartz, a spokeswoman for the paper, said: "We stand by our reporting."
Bridgewater, the world's largest hedge fund, paid a more than $1 million settlement to a woman who had a relationship with Jensen, the firm's co-chief investment officer, the Journal reported earlier Tuesday. After agreeing to the settlement, the employee was escorted out from her desk, the newspaper said.
Dalio was personally involved in approving the settlement and in mediating the matter, which was brought to the firm's attention about three years ago, the Journal reported, citing people familiar with the matter that the newspaper didn't identify. Shortly after the first woman came forward, another woman accused Jensen of groping her, the report said.
Jensen, 43, was co-chief executive officer at Bridgewater at the time. The woman involved in the settlement had a consensual relationship with him, the Journal said. The second woman remained at the firm after making her claim but has since also left.
In a tweet posted on Tuesday morning, Dalio wrote: "A good principle is 'Don't believe everything you read in the newspapers."'
Jensen said in a statement to the newspaper: "The Wall Street Journal's accusations of my behavior are inaccurate and salacious. They are hurtful to my family and my reputation with those who don't know me, so I am deeply disappointed with their sense of responsibility."
Attempts by Bloomberg News to reach Jensen on Tuesday were unsuccessful. A message was left at his home, and a call to his office was referred to the firm's public relations staff.
The female employee who got the settlement was represented by attorney Gloria Allred, the Journal said. Allred declined to comment when reached by Bloomberg News.
Jensen gave up the co-CEO title in early 2016. He now shares the CIO post with Dalio and Bob Prince.
Dalio runs Westport, Connecticut-based Bridgewater according to about 200 principles -- everything from "Don't try to please everyone" to "Don't bet too much on anything." He promotes "radical transparency," encouraging employees to critique each other in meetings, which are taped and archived. He published a book of the principles in September.
Bridgewater's Pure Alpha hedge fund rose 3 percent in October, recouping losses this year. The fund has now gained 1.7 percent through the first 10 months of this year.