Calamos Investments, one of the state's biggest asset managers, has been struggling to stem investor outflows, and now it has another problem: a whistleblower lawsuit.
Gene Katz, formerly director of corporate development at Calamos, sued the firm Wednesday in federal court, saying Calamos fired him in retaliation for an e-mail he sent its top executives outlining what he called “imminent risks to the company and its future,” according to the complaint.
In July, Mr. Katz sent the e-mail to Calamos Chairman John Calamos Sr., CEO John Koudounis and other executives, saying he wasn't going to “stand by to watch or be part of the dishonesty” happening at the firm, according to the lawsuit. Within an hour, a group of Calamos security, human resources and other executives arrived at his desk to escort him off the company's property, the complaint says. They said he had been fired, although later he was put on administrative leave, but ultimately terminated last month, the suit states.
In the lengthy e-mail attached as an exhibit to the filing, he alleged conflicts of interest, poor mutual fund performance, excessive compensation for a new CEO (Mr. Koudounis), and ill-advised ideas to move into insurance and fixed-income businesses were leading the firm toward the “verge of falling apart.”
Mr. Katz is seeking compensation for “lost wages and future loss of earnings” and benefits as a result of the “retaliatory discharge.” He also seeks damages for pain and suffering and emotional trauma, as well as punitive damages.
Calamos General Counsel Chris Jackson said the company doesn't typically comment on pending litigation, but he broke from that approach Thursday.
“We think the complaint is totally without merit,” Mr. Jackson said. “All the defendants vehemently deny the false allegations in the complaint,” he said, calling Mr. Katz “a disgruntled former employee.”
The company “will vigorously defend ourselves against these meritless claims,” Mr. Jackson said.
Naperville-based Calamos has seen its assets steadily decline in recent years. The firm's assets under management declined to $20.5 billion as of the end of July, down from $26.5 billion at the end of 2013. Its stock has plummeted over the past year, losing more than half its value since late 2014.
While Mr. Katz was tasked with seeking out mergers or acquisitions for Calamos in the asset management field, there weren't any under consideration, according to the lawsuit.
Mr. Katz had been at the company since January 2015. The firm had been experiencing an outflow of assets and the departure of some top executives since before his arrival.
Mr. Katz couldn't be reached for further comment.