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Bill Gross sues Pimco for US$200m over forced ouster
[NEW YORK] Famed bond investor Bill Gross has sued his former employer Pacific Investment Management Co and its parent Allianz SE for US$200 million, claiming he was wrongfully ousted by a "cabal" of executives who wanted his share of the bonus pool.
In a complaint filed on Thursday in the California Superior Court in Orange County, Mr Gross said Pimco managing directors were"driven by a lust for power, greed, and a desire to improve their own financial position and reputation" in an ultimately successful plot to drive him out.
Pimco spokesman Mike Reid declined to comment.
The lawsuit ratchets up an exchange of vitriol between Mr Gross, who now runs the Janus Global Unconstrained Bond Fund for Janus Capital Group Inc, and Pimco, which he built into the largest US bond fund complex during his four decades there.
Mr Gross, known on Wall Street as the "Bond King,"unceremoniously left Pimco in Sept 2014, eight months after his management style helped prompt second-in-command Mohamed El-Erian to quit.
That style, along with weak performance and investor outflows at Gross' flagship bond fund Pimco Total Return , was also the subject of much negative press in 2014.
In the complaint, Mr Gross said younger Pimco executives had plotted to drive him out, and share in the 20 per cent of Pimco's bonus pool to which he was entitled, because they believed his presence was impeding their careers and limiting their paychecks.
He said the plan to push him out was "hatched" by Daniel Ivascyn, who succeeded Mr Gross as Pimco's group chief investment officer, and allegedly helped recruit others to the cause.
The bonus pool totaled US$1.3 billion in 2013, the last full year before Mr Gross left, and Mr Gross' compensation that year topped US$300 million, according to the lawsuit.
The lawsuit accuses Pimco of constructive termination, breach of contract, and exercising bad faith.