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Money management

D.E. Shaw fires fund manager for ‘gross violations’

D.E. Shaw & Co. fired veteran fund manager Daniel Michalow after an internal review found that numerous employees had accused him of inappropriate behavior.

"Daniel Michalow engaged in gross violations of our standards and values," a D.E. Shaw spokesperson said in a statement Monday. "During the course of a recent investigation prompted by an employee complaint, a number of other employees came forward to report his abusive and offensive conduct. His employment was swiftly terminated."

Mr. Michalow was accused of comments and actions that raised concerns about harassment and discrimination toward women, according to a person familiar with the matter. He told a person involved in hiring that the firm should bring on an assistant to work with him who would tolerate inappropriate behavior, the person said.

That comment sparked a preliminary investigation by human resources, which led to Mr. Michalow's suspension. He was fired in March after the review revealed that multiple people accused him of misbehavior toward women, the person said.

In a five-page letter Mr. Michalow sent to founder David Shaw and seen by Bloomberg, he accused the firm of privately telling him there was no sexual misconduct but refusing to state that publicly on the record, and said the firm made him a "scapegoat with a proverbial hanging in the town square."

"While I was surely an abrasive boss and perhaps deserved to be fired for my style, there is no basis for the whisper campaign about anything sexual," Mr. Michalow wrote in the May 7 letter.

The letter also criticizes the New York-based company for "lavish, alcohol-filled parties," allowing executives to have relationships with their direct reports and looking the other way when senior managers attend strip clubs.

D.E. Shaw "is committed to a work environment of mutual respect, in which everyone is free from harassment and discrimination," the firm said in an internal communication on Monday, declining further comment. The firm oversaw almost $50 billion as of Jan. 1.