An ex-partner at Bridgewater Associates accused the world’s largest hedge fund of favoritism as well as age and sex discrimination, the second such complaint from a senior executive in recent months.

The partner, Jeff Gardner, 53, was fired from Bridgewater in December after working there for almost three decades, according to a filing in Connecticut Superior Court. He made the filing along with Paul Ross, 43, a former senior executive who previously submitted a similar complaint to Bridgewater’s board.

Their accusations stem from Chief Executive Officer Nir Bar Dea’s past office romance with another Bridgewater employee and a restructuring of the firm last year that ousted Gardner and Ross from their roles, according to the filing. Bridgewater founder Ray Dalio relinquished control of the firm in September 2022, and Bar Dea was elevated to sole CEO last March.

In their petition, Gardner and Ross ask Bridgewater and board members Margo Cook and Michael McGavick to produce documents tied to the restructuring and to the firm’s handling of Bar Dea’s past romantic relationship. In seeking the information, they say they have “probable cause to support potential claims” against Bridgewater, Cook and McGavick.

A Bridgewater spokesman had no immediate comment on the filing. An outside review previously found no merit to Ross’s claims, which Bridgewater has denied.

Executive Shuffle
Gardner and Ross accused Bridgewater of discrimination after Bar Dea’s former romantic partner Erin Miles and her ex-fiance Sean Macrae were elevated in last year’s shuffle.

Ross, who worked for Bridgewater for almost 20 years, was replaced as head of the Investment Engine as part of the restructuring. The firm removed Gardner from his senior role in client services and reassigned a substantial part of his responsibilities and direct reports to reporting lines running to Miles and Macrae, according to the petition.

In January 2023, Bar Dea started holding meetings to discuss the firm’s restructuring in the two areas, according to the filing. At one meeting, Gardner was removed from the organizational chart and his direct reports reassigned. After the meeting, Gardner alleged that the co-chief investment officer leading the restructuring told him to take an unpaid six-month sabbatical.

At a meeting in March, Bridgewater’s senior leadership said the “restructuring decisions were motivated and premised on the age of senior managers who would be replaced by younger hires as a means of ‘investing in the future,’” Gardner and Ross allege.

Bridgewater told employees that the restructuring was designed to promote managers who had come up through the investment ranks, according to people familiar with the firm.

Lackluster Returns
The men’s allegations also stem from the hedge fund’s lackluster returns. Bridgewater’s flagship hedge fund strategy has struggled for most of the past decade, reporting a 7.6% loss last year — the third-worst decline in its history.

The firm retaliated against Ross and Gardner for complaining in 2022 about the poor performance, the two alleged in their petition. In 2022, Bar Dea and other senior executives reacted negatively to their complaints about the low returns, according to the filing.

Gardner also asked whether the firm properly disclosed high transactional costs to clients. Ross focused on improving the lagging equities group, including hiring new leadership, according to the filing.

Both men requested an independent, third-party investigation of the leadership and the board because of Bar Dea’s relationship with Miles, and her and Macrae’s promotions.

Independent Probe
The firm hired outside counsel to investigate Ross’s claims but didn’t do so for Gardner, the two said in their filing. The review, conducted by law firm Clarick Gueron Reisbaum last year, found no merit to Ross’s claims. Ross said he didn’t receive a copy of the report or any specific information about its findings.

Both men are requesting a new investigation, they said in their petition.

In comments to Bloomberg News in late December addressing Ross’s complaint to the board, Cook and McGavick said that a former employee had asserted that one of “our best people, a woman with over 14 years of experience and outperformance at the company, was promoted for reasons other than her extensive qualifications,” even though he had previously praised her.

“To advance his own self-interest, he perpetuates deeply harmful dynamics that have been used against the most capable people, and women specifically, since the beginning of time,” they added.

This article was provided by Bloomberg News.