TCW accuses Gundlach of secret plot to steal 'entire business'

TCW accuses Gundlach of secret plot to steal 'entire business'
TCW Group Inc.'s former investment chief Jeffrey Gundlach plotted with colleagues to steal the company's trade secrets before he was fired and started a rival money-management firm, a lawyer for TCW told a jury.
JAN 25, 2012
By  Mark Bruno
TCW Group Inc.'s former investment chief Jeffrey Gundlach plotted with colleagues to steal the company's trade secrets before he was fired and started a rival money-management firm, a lawyer for TCW told a jury. “They tried to steal an entire business from TCW worth hundreds of millions of dollars,” TCW lawyer John Quinn said in his opening statement today at a state court trial in Los Angeles. “They secretly plotted to leave en masse.” TCW, the Los Angeles-based unit of Societe Generale SA, sued Gundlach, 51, and three other ex-employees in January 2010, a month after he was fired and more than half of TCW's fixed- income professionals had joined his firm, DoubleLine Capital LP. TCW seeks $375 million in damages, claiming Gundlach stole its trade secrets as he plotted to start his own business. Gundlach, who had worked at TCW for 25 years and who was named Morningstar's Fixed Income Manager of the Year in 2006, said in a cross complaint that TCW fired him to avoid having to pay as much as $1.25 billion in future management and performance fees for the funds his group managed. Gundlach has since reduced his damages estimate to about $500 million. DoubleLine's lawyer, Brad Brian, is scheduled to give his opening statement later today. The trial may have undesirable consequences for both sides, said Geoff Bobroff, an independent fund consultant in East Greenwich, Rhode Island. Gundlach, who has attracted $13 billion in assets since his firm opened, may see damage to his reputation, while TCW Group risks the disclosure of its inner workings and details such as fees. “The monetary piece of the trial is less important than the exposure involved,” Bobroff said in an interview. “Clearly, TCW wouldn't like to have the dynamics of their company and workings on display.” TCW said in its complaint that Gundlach was only able to start his new firm within weeks after he was fired because he and the other three former employees had secretly been taking steps to set up DoubleLine in September and October of 2009, while they were still at TCW. The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court, Los Angeles County. Bloomberg

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.