- David Einhorn's Greenlight states a former employee lied about his role, among other offenses, in a new lawsuit.
- Einhorn's suit states that James Fishback was set to be fired before he resigned.
- Fishback has previously sued Greenlight for defamation for not confirming his past role.
David Einhorn warned James Fishback he was on "thin ice" less than a year after hiring him. A new lawsuit shows how quickly cracks emerged.
Einhorn's firm, Greenlight Capital, is suing his former analyst, Fishback, Tuesday evening in New York. The lawsuit claims a variety of offenses, including breaching his employee agreement by lying about his role and performance at the firm and sharing and downloading confidential information, and defaming the firm's leadership.
"This is a desperate ploy by Greenlight to save face with its investors after they now know the truth about (1) who was actually responsible for Greenlight's insane macro returns and (2) the lengths to which Greenlight retaliated against me for the crime of starting Azoria Partners, a direct competitor to Greenlight. I will respond to each of their baseless allegations in detail. Stay tuned," Fishback said in a statement.
Fishback, who is in the process of raising money for his own hedge fund, has stated publicly that he was the "head of macro" for the firm, a title Greenlight states has never been distributed to any employee. In the new suit, Greenlight lays out that Fishback had been — unbeknownst to the firm and its management — setting up speaking engagements with this title in hopes of bolstering his own reputation.
When the firm approached Fishback about it last August — after the analyst had already tendered his resignation from Greenlight — Fishback sent the firm a revised copy of the agenda of a Citi conference he was speaking at with a new title for himself: Founder and CIO of Azoria Partners.
Subsequent digging by Greenlight, according to the new suit, found that the domain name for Azoria was registered nearly a month before Fishback resigned. Fishback's resignation letter stated he was leaving to focus on a passion project, a high-school debate nonprofit that he had featured in a viral essay on Bari Weiss's new conservative media site.
But Greenlight believes he had been planning to launch a competing fund while still at the firm, and states that the inflated title Fishback is using is damaging its business.
"Both Fishback's misuse of confidential information and misrepresentations about his purported responsibility for Greenlight's success have caused Greenlight irreparable harm," the suit reads.
"By falsely conveying that he was responsible for the management and success of Greenlight's macro investment portfolio, he has both wrongfully misappropriated a valuable asset belonging to Greenlight for himself, and harmed Greenlight by attempting to undermine investor confidence in Greenlight's capabilities."
Fishback has claimed he was responsible for more than $100 million in profits for the asset manager, but the suit notes that "none of this is true."
The suit also outlines Fishback's consistent underperformance, which prompted Einhorn to remind him on several occasions that he was on "thin ice."
"Fishback was such a poor performer at Greenlight that Greenlight had actually decided to terminate him for his lack of productivity and scheduled a meeting with him to do so, but he abruptly resigned when he deduced that he was about to be terminated," the suit states.
"And, since he had absolutely no authority or discretion whatsoever over Greenlight's macro investment portfolio, he was not responsible for generating any profits, let alone 'over $100 million' of profits."
Fishback sued Greenlight last October for defaming him by not confirming to potential investors in his new fund that he was once the manager's head of macro. A person close to the former analyst told Business Insider in May that the two sides were in arbitration. Greenlight additionally sued Fishback over an unpaid loan in March.
But the suit from Greenlight states Fishback "voluntarily dismissed" his claims in order to go to arbitration — but has yet to commence those proceedings or refile his suit.
"Simply put, Fishback's behavior demonstrates that he is not concerned with whether his actions are lawful," the suit reads.
"He employs dishonest tactics to attain his goals. He has lost any benefit of the doubt that he is a good faith or rational actor."
Additionally, Business Insider rounded up the four most surprising claims about the previously under-the-radar firm made in the 58-page lawsuit filed Tuesday in a New York federal court.
- Threats to disrupt Greenlight's partner dinner
The suit claims Fishback threatened to stand outside Greenlight's annual gathering of investors and service providers with letters that "maliciously and disingenuously called into question Greenlight's macro investing abilities." He ended up not following through on these threats.
- Asks for a matching donation to his own nonprofit
Fishback's nonprofit debate-club-focused organization was the topic of several claims in the suit, including one that alleged Fishback asked for a matching donation to the organization, a company policy of Greenlight's, but could never provide sufficient evidence that he had donated.
Fishback asked for a check instead of a bank wire, telling Greenlight's staff that his nonprofit was changing bank accounts. After several months of asking for proof of his original $10,000 donation, the firm decided not to send any money.
3. Greenlight discovers Fishback's personal endeavors have employees
Greenlight said that Fishback's performance issues were compounded because he was devoting increasing time and effort to his personal endeavors, specifically Incubate Debate, an organization that puts on high school debates.
For example, on April 13, 2023, Greenlight learned for the first time Fishback was managing five full-time employees at Incubate Debate, which had never been disclosed to Greenlight and violated internal policies.
4. The Jelly Donut Assignment
An essay that Fishback had been assigned by Einhorn to do, referred to in the complaint as the "Jelly Donut Assignment," came in several months behind its deadline. The firm reviewed its computer system after questioning how much effort Fishback put into the work.
The review showed that Fishback had "almost no work files saved on Greenlight's network drive, and had engaged in very little activity on Greenlight's computer system. This effectively confirmed that Fishback had not put any serious amount of work into the Jelly Donut Assignment, as he would have needed to have been active in the network drive during the process in order to do so."
The firm decided that the lack of work on Greenlight's network drive meant he was either saving it on his personal devices — violating the firm's policies and employment agreement— or he didn't do any "meaningful work during his entire tenure at Greenlight."
The firm decided to fire Fishback after this review.
