Liddle & Robinson Attorneys at Law New York City


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Richard W. Kates v. Deutsche Bank - 7/13/2001

Award Amount- $200,000.00

Case Summary: Our client, Richard W. Kates, served as co-manager of the Deutsche Bank New World Fund, which was launched with approximately $30 million in January, 1997. Approximately one year later, the fund had $260 million under management, and was one of the most successful hedge funds anywhere that year. Nonetheless, due to internal politics, Deutsche Bank removed Kates’ trading authority on Christmas Eve, 1997, and alerted all of the fund’s trading counterparties of this fact, based on false charges of impropriety by another less successful and jealous manager. Deutsche Bank then fired Kates in May, 1998, even while Kates was gathering evidence to clear his name. Indeed, although Deutsche Bank’s internal and external auditors cleared Kates of any wrongdoing, Deutsche Bank refused Kates’ requests that his trading authority be restored, primarily because the New World Fund’s less experienced co-manager wanted to manage the fund by himself. Kates sued Deutsche Bank for defamation and wrongful termination, and following a 19-day hearing, a NYSE panel agreed that Kates had been wrongfully terminated and defamed. The panel awarded Kates $150,000.00 in damages, and an additional $50,000.00 in attorneys’ fees, based on Deutsche Bank’s misconduct in withholding hundreds of pages of important and material documents until the middle of the case. The arbitration panel also assessed Deutsche Bank with all forum fees, totaling $36,000.00. This is arguably the first case where an arbitration panel in New York found a securities firm liable for wrongful termination under a common law doctrine prohibiting employers from terminating employees except for “just cause,” where the parties have agreed to arbitrate any disputes concerning employment issues.

Lawyer(s):
Jeffrey L. Liddle
Ethan A. Brecher
Christine A. Palmieri


Web Info(URL) www.nyse.com/pdfs/1998-007498.pdf



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