A Wall Street hedge fund whose boss recently demanded the return of a $100 million donation to the University of Pennsylvania because of anti-Semitism is now facing charges. The allegation is that the company refused to pay one of its former executives millions in bonuses to which he was entitled.
Ross Stevens, who made headlines in December when he withdrew a multimillion-dollar financial commitment to his alma mater, an Ivy League university, over its weak response to anti-Israel protests on campus, is now being sued by Erick Goralski, the former head of client strategies at Stevens’ fund Stone Ridge Asset Management.
Goralski, who previously worked as a banker at Deutsche Bank and Lehman Brothers, alleges in the Aug. 2 lawsuit filed in New York state court that Stevens breached an agreement to pay him lavish bonuses of up to $50 million annually over a six-year period.
This comes despite New York-based Stone Ridge – whose investments include cryptocurrencies, fine art and fintech lending – recently publicly announcing that it had made over $1 billion in trading profits last year.
“This is about the greedy side of Wall Street that everyone thinks exists,” a source close to both lenders told the Washington Post. “And it does exist.”
The case follows Stevens’ public clash with former UPenn President Liz Magill, who said he was “appalled” by her testimony before Congress on December 5 in which she failed to confirm that calls for genocide against Jews were against school policy.
Two days after the hearing, Stevens said he would withdraw a planned $100 million donation.
Four days later, on December 11, Magill resigned.
A UPenn spokesperson did not respond to The Post’s request for comment.
After Goralski left Stone Ridge in 2018, Stevens promised to pay him a $4.4 million windfall in 2019, followed by a $9 million payout the following year and $10 million the year after that, Goralski’s lawsuit says.
But Goralski complains that he allegedly only received $700,000 from Stevens in 2019 before the money dried up.
Goralski helped Stevens – who briefly worked at Goldman Sachs after graduating from the University of Pennsylvania’s prestigious Wharton School – found Stone Ridge in 2012 with a focus on alternative investments such as reinsurance and bitcoin, the lawsuit says.
Court documents say the two’s relationship was “soured” by a “long-running dispute” over the “treatment of equity for co-founders and key initial hires.”
“It’s either Ross’ way or it’s going to go wrong,” the source familiar with their relationship added. “He was really upset that Erick was questioning his decision-making.”
Goralski, 52, who declined to comment, now runs boutique investment firm Mobilize Capital Partners.
Stone Ridge Asset Management’s attorneys in the case did not respond to emails and calls from The Post seeking comment.
Goralski alleged in his complaint that there were “differences of opinion about the direction of the company,” which controls more than $20 billion in assets. In a series of LinkedIn posts over the summer, he took thinly veiled swipes at Stone Ridge.
In a post last month, he described his time at the company, saying that “an energy was built there that was not only positive.”
“I witnessed a constant tension between the chosen values, like ‘Focus’, that adorned the coffee cups and the excitement of bringing the next big new idea to market,” Goralski wrote. “Most of the time, focus won out, but there were also many interesting discussions behind closed doors.”
The documents show that on July 26, Stone Ridge lawyers served Goralski with a cease-and-desist letter regarding the LinkedIn posts, arguing that they violated the 2018 severance agreement and “specifically relate to his employment and relationship with Stone Ridge and its founder (Ross Stevens).”
Last month, Stone Ridge’s lawyers threatened to recoup the money he earned in the two years before he left the firm if he did not immediately stop his social media posts, court documents show.
In 2018, Stone Ridge’s lawyers drafted a letter promising Goralski millions of dollars to “quietly leave,” the lawsuit says. The 2018 offer, which appears in court documents, shows he was formally to be retained as a “special adviser” to Stevens.
The lawsuit described the agreement as “a pretext that Stone Ridge needed to justify the substantial compensation payments it made to him following his separation.”
According to the contract, the amount of the bonus payments was at the CEO’s “discretion,” but the lawsuit quotes Stevens as telling Goralski, “I don’t care what it says on paper, I’m going to pay you that money.”
