InvestmentsNov 10 2015

Pimco accuses Gross of ‘reputational warfare’

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Pimco accuses Gross of ‘reputational warfare’

Pimco has moved forward - Bill Gross should do the same, legal documents filed at the Superior Court of California have stated.

On 8 October, Pacific Investment Management Company LLC (Pimco), and its parent company Allianz Asset Management of America, filed a joint notice of hearing to the Superior Court of California.

The 15-page document called on the court to dismiss the $200m lawsuit brought by Bill Gross in October, in which he claimed he had been plotted against and driven out of Pimco, the firm he founded 40 years ago.

According to the defendants’ joint document, the complaint made by Mr Gross was a “legally groundless and sad postscript to what had been a storied career at Pimco”.

The document read: “During his final year with Pimco, Mr Gross engaged in a pattern of conduct that was incompatible with the values and standards that Pimco expected of those entrusted with its leadership”.

It also claimed that he resigned “abruptly” from his position.

The document read: “The complaint - parts of which read more like a screenplay than a court pleading - uses irrelevant and false personal attacks on Mr Gross’s former colleagues”.

Calling for the case to be dismissed, the document added: “Pimco has moved forward since Mr Gross’s resignation. It is time for him to do the same.

“The Court should reject his effort to turn a baseless bonus claim into a prolonged litigation.”

Mr Gross’s claim is for wrongful dismissal from the company he founded in 1971, where he ran Pimco Total Return until his departure last year.

Mr Gross, who has since joined Janus Capital Group, said some of his colleagues were “driven by a lust for power, greed, and a desire to improve their own financial position and reputation at the expense of investors and decency.”

It was also claimed they wanted to force him out and claim his 20 per cent stake in the bonus pool.

Mr Gross, who is now running the Janus Global Unconstrained Bond fund, claimed he resisted attempts to offer the more lucrative but riskier products favoured by some of his colleagues, including his deputy Mohamed El-Erian, who has also left Pimco.

A request for a hearing on 16 March 2016 has been made by Pimco.