(Bloomberg) -- Daniel Michalow, the veteran fund manager fired by D.E. Shaw & Co. in 2018, won $52.1 million Wednesday from the firm, likely one of the largest recent awards of its kind.
That’s less than the $600 million he was seeking for defamation in arbitration run by Wall Street’s self-regulator, the Financial Industry Regulatory Authority, according to a document on its website. Besides D.E. Shaw, the case was against four top executives, who declined to comment through a company spokesperson.
“I’ve learned a great deal from this experience and am excited for the future,” Michalow said in an email, calling the award “appropriate.”
The spokesperson for the fund said D.E. Shaw was disappointed. “We stand by the decision we made in 2018 to terminate Mr. Michalow’s employment with the firm.”
The award is likely among the biggest seen in years inside Wall Street’s secretive arbitration system. The fund, one of the most prominent in the global hedge fund industry, had accused Michalow of “gross violations of our standards and values” four years ago. It said then that a complaint prompted an investigation, and that employees reported his “abusive and offensive conduct.”
Michalow described himself as a “scapegoat with a proverbial hanging in the town square” in a letter to founder David Shaw at the time. Michalow sometimes “hugged colleagues in parting” and made “inappropriate jokes,” he wrote in the letter, but “didn’t go around touching people inappropriately” or discriminating against colleagues. “While I was surely an abrasive boss and perhaps deserved to be fired for my style, there is no basis for the whisper campaign about anything sexual.”
In his email to Bloomberg News after the award came down, Michalow referred to the fund’s founder. “Now David Shaw knows I was telling him the truth.”
After one arbitrator withdrew from the case in May, the two men left on the arbitration panel decided Michalow “did not commit sexual misconduct.”
On Wall Street and across corporate America, millions of employees haven’t been able to sue their bosses over bad behavior in court, and instead are sent into the quieter system of arbitration. For years, it’s been held up as part of a machine of silence preventing more allegations of bad behavior from being aired.
The award stands out to Dochtor Kennedy, a lawyer who specializes in financial arbitration.
“It’s freaking massive,” he said. “You get $1 million, you’re an outlier for that year.”
(Updates with comments from Michalow beginning in third paragraph.)
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