A former managing director at Archegos is suing the Grace and Mercy Foundation, a Christian nonprofit.
Brendan Sullivan is seeking millions of dollars in compensation he says he is owed after Archegos leadership allegedly forced employees to put their bonuses back into a fund at the firm. He says that money was then invested in stocks and transferred to Grace and Mercy, Christianity Today reports.
He said Grace and Mercy then sold the stocks and kept the profits, which then gave Archegos a tax deduction for the “donation.”
“These share transfers to the foundation were all coming from the Archegos Fund, which included employee deferred compensation … which was done without the knowledge or consent of employees,” the lawsuit says.
The lawsuit comes after federal prosecutors charged Archegos founder Bill Hwang with racketeering and “massive fraud” in April.
In 2021, banks that had lent money to Archegos lost $10 billion, and the firm collapsed.
Hwang, who has been outspoken about his Christian faith, is currently free on a $100 million bond and awaiting trial.
Sullivan started at Archegos in 2014 and resigned in March 2021. According to Bloomberg, Sullivan put about $3.8 million into the deferred compensation fund, but he is suing for close to $30 million based on inflated profits.
Sullivan said Hwang ran the fund like a “cult” and pressured employees with his Christian faith. He also said performance reviews included questions about employees’ faith and that employees were pressured to go to lunchtime Scripture readings.
Christopher Porrino, a lawyer for the Grace and Mercy Foundation, said in a statement that “Mr. Sullivan’s complaint against The Grace and Mercy Foundation is filled with baseless and frivolous allegations, all of which will be decisively refuted in court.”
Sullivan alleges that Hwang described the foundation as his “escape pod,” and when Archegos was in trouble, Hwang said that if the firm collapsed, he could move employees to the foundation and use its capital to restart another investment firm, “Archegos 2.0.”
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Amanda Casanova is a writer living in Dallas, Texas. She has covered news for ChristianHeadlines.com since 2014. She has also contributed to The Houston Chronicle, U.S. News and World Report and IBelieve.com. She blogs at The Migraine Runner.