Terminated Manager Free to Challenge Highland Capital in Arbitration
Sunday, November, 6, 2016
One of Highland Capital Management LP’s former portfolio managers is free to force the company into arbitration regarding his claims of undue termination. He believes he was fired after he questioned the firm’s illegal self-dealing with outside investors and expressed concern the US Securities and Exchange Commission might question a transaction.
According to Highland Capital, former manager Joshua Terry, was the party guilty of engaging in self-dealing and attempting to profit at a client’s expense. The company has also accused Terry of having sexual relationships with subordinates and making disparaging remarks about Highland executives, and asked the Dallas court to rule Highland doesn’t owe Terry any benefits or payments. Highland also claims Terry illegally recorded his colleagues and investors, and the legal filings Terry has since made contain quotes taken from those recordings, which include the president of the company calling investors “jackasses.”
Recently, a Dallas state court judge ruled Terry can send the dispute to arbitration and stated it made sense the claims first be considered by an arbitrator. The company requested the judge order Terry not to disclose confidential information, which included the information contained in the recordings. The company wanted Terry’s attorneys to quit because the case benefitted from access to the recordings, but the judge determined the arbitrator will need to make a decision about the attorneys.
Highland has publicly called Terry’s claims “without merit” and has stated the company is confident the arbitrator will reach the same conclusion. Terry’s attorney stated he and his client are pleased with the ruling by the judge concerning arbitration.