Investment bank worker pleads guilty to securities and mail fraud charges, receives jail sentence
An employer cannot escape liability for negligent supervision and retention by being “doubly negligent” and by shutting its eyes to its employees’ tortious practices and propensities, the State of New York Court of Appeals said in a recent case.
The case of The Moore Charitable Foundation v. PJT Partners involved PJT Partners, Inc. and Park Hill Group, LLC, which were an investment bank and one of its divisions. In 2013, they hired an employee to begin a business line focusing on fund recapitalization work and vested him with significant authority.
The employee succeeded in bringing in a substantial amount of work for his employer. However, as time passed, he allegedly started showing signs of dangerous and destructive behaviors during work hours, including:
In 2014, the employee landed a large deal involving the recapitalization of a private equity fund managed by Irving Place Capital. He ended up diverting the $8.1 million fee to himself for the purpose of purchasing securities through his personal account.
After the deal’s closure in 2015, some of the employer’s other workers asked the employee about the delayed payment of...
The court found the relator did not allege specific reimbursement requests or facts linking challenged promotional statements to government payments. A Maryland federal district court dismissed a ...