Craig Kelleher, former senior analyst at hedge fund manager Regiment Capital Advisors, filed suit in Massachusetts Superior Court in Boston against the company, alleging breach of contract and other employment-related charges. According to court documents, Mr. Kelleher claims Regiment did not pay him promised compensation of 50% of fees earned for a strategy he said he devised to use derivatives to short subprime mortgages. The strategy brought Regiment about $100 million in market returns in 2007, according to the suit. Mr. Kelleher is seeking unspecified damages and payment of his legal costs.
Mr. Kellehers attorney, David Rapaport, a partner at Davis Malm & DAgostine, did not return a call seeking more information. Timothy Peterson, Regiments president, did not return a call seeking comment, but the firms attorney, Denise Murphy, said the claims are baseless and without merit. Ms. Murphy is a partner at Rubin and Rudman.