Paul Touradji embroiled in a law case of endless twists and turns

After a two-week trial in May 2019, hedge fund manager Paul Touradji was found guilty, by a unanimous jury verdict, of not paying two of his ex-staffers Gentry Beach and Robert Vollero millions of dollars in bonus pay. The plaintiffs, Beach and Vollero, claimed that they had oral contracts with the defendants, Touradji and Touradji Capital Management (TCM) which included a bonus of the fixed percentage of profits made. Beach and Vollero were awarded $46 million in back pay.

Paul Touradji article image thumbnail ddTouradji, who claimed the plaintiffs had a contract of a base salary with a discretionary bonus, brought forth 2 motions to counter the jury’s verdict. The first was made orally the day of the jury’s decision, claiming that their verdict was unsupported by the evidence provided. This motion was summarily rejected by the court. This would normally have been the end of the affair, but Touradji decided to try his luck once again in overturning a duly brought verdict and  brought forth a second motion on June 10th to set aside the verdict and have a new trial.

New York State Supreme Court Judge Andrew Borrok categorically denied the motion stating that Touradji was given chance after chance to put forward his case but only after having received an unfavorable verdict did he wish to have a do-over. In his decision, Borrock writes that the jury had duly considered both side’s claims and returned a verdict that was supported by the evidence.

A copy of Borrock’s fervent rejection of the defendant’s motion has been made available and here are its highlights:

  • The plaintiffs presented TCM’s own letters, emails and accounting records that reflected that the plaintiffs had an oral agreement which included fixed percentage compensation. They also presented documents and testimony from their financial planners at that same time period showing reflections of their deal terms with TCM. And significantly, even TCM’s own witness at trial, Kate Fleet, acknowledged that she understood, and TCM investors were told, of Mr. Vollero’s fixed compensation arrangement.
  • In addition, the verdict had firm support in a document produced at trial titled, “Touradji Capital Management LP, Compensation Summary – RV/GB Calculation.” Mr. Touradji testified that it was created by TCM’s CFO, Tom Dwan. The document addressed year-end bonuses and included percentage bonus calculations for Robert Vollero and Gentry Beach. Initially, Mr. Touradji indicated that he had not seen it before the litigation commenced. Ultimately, he recanted in front of the jury. Based on his testimony and the evidence alone, there was a reasonable basis for the jury to find that there was a contract for fixed percentage bonus compensation between TCM and the plaintiffs.
  • The evidence showed that Mr. Touradji changed this document on a number of occasions by increasing the expenses allocated to the plaintiffs and thus decreasing their compensation. If the deal was as the defendant suggested , a base salary with a discretionary bonus – it is hard to conceive a legitimate explanation as to why Mr. Touradji would have made those otherwise superfluous and unnecessary changes.
  • Touradji’s testimony also revealed that the financial information contained in TCM spreadsheets changed constantly and without any procedures in place to ensure their accuracy and that such changes were made by Mr. Touradji without any procedures in place as to the time that such changes were made and ensuring that such changes were accurate or appropriate. The so-called business records at TCM, appeared to be little more than what Mr. Touradji arranged them to be on any particular occasion.
  • Finally, one of the more curious “errors” cited by the defendant is the court’s decision to permit the plaintiffs’ counsel to show Mr. Touradji a picture of himself on the cover of Fortune magazine. Here, the defendant asserted that this photograph, along with Touradji’s testimony about the watch he was wearing in the photograph, was prejudicial because it provoked the “jury’s antipathy” and “discomfited Mr. Touradji”. While Mr. Touradji’s answers may have lost him some credibility with the jury, as he was not able to recall the brand of the watch he was wearing which is visible in the photograph (and testified that he owns only three other watches) and was uncomfortable acknowledging that it was even a photograph of him though it clearly was – this was clearly not a sufficient basis to have another trial!

Judge Borrok was clearly perplexed and exasperated at Touradji’s lack of respect for the jury’s unanimous decision. If he had the least regard for the courts of law in the USA he would never have even dared to bring forth not one but two motions to repeal justice.

To make matters even worse, Touradji has shown his complete disregard for the judicial system by transferring over hundreds of millions of dollars from his business to himself and to his sister in order to avoid having to pay Vollero and Beach. Touradji received a total of $314.8 million in transfers between 2012 and 2018 and his sister received $13 million between 2012 and 2017. In order to receive the $46 million the court ordered Touradji pay, the plaintiffs are now asking the court to order that the transfers be ruled fraudulent. Judge Andrea Masley has issued a temporary restraining order that blocks Touradji from transferring his assets.

Touradji may not realize how low he has sunk but he will certainly find out soon as his game of buying time in order to escape justice is about to come to an abrupt end.