Trahan Claims Ex-Cornerstone Macro Partners Stole Business
(Bloomberg) -- Francois Trahan, who co-founded the boutique research firm Cornerstone Macro LLC in 2013, is suing the firm and his former partners, claiming they schemed to “steal Trahan’s multi-million-dollar business through deception and fraud.”
Cornerstone announced its decision to “part ways” with Trahan, its former co-head of strategy, in October. Trahan sued for unspecified damages in federal court in Manhattan on Wednesday.
Trahan said in his complaint that in March he told Nancy Lazar, another Cornerstone founder, that he “could no longer remain in business” with her and offered to buy out her interest for “tens of millions of dollars” or to sell his own interest at a similar price. He said she and other partners named as defendants in the suit then used fraud and deception to take his business without paying.
Trahan claims his former firm illegally took his intellectual property, including proprietary computer models, reports and data analysis, and used it to try to court his clients.
“Mr. Trahan was treated more than fairly by our firm and his claims are baseless,” Cornerstone Macro said in a statement. The firm said it looks forward to defending the case in court.
More: Trahan to Leave Cornerstone 5 Years After Co-Founding Firm
Trahan, 49, was named to Institutional Investor’s All-America Research Team Hall of Fame in 2016 after taking the top spot in Portfolio Strategy for 10 of the previous 11 years. Before Cornerstone Macro, he was vice chairman and chief investment strategist at Wolfe Trahan & Co., now Wolfe Research LLC. Before that, he was chief investment strategist at ISI Group as well as head of ISI’s quantitative-research team.
Cornerstone Macro offers economic, policy, equity strategy, options strategy, technical analysis and energy research to institutional clients from offices in New York and Washington, the firm says on its website. The firm also offers equity and options trading.
Trahan said the firm was set up in April 2013 with four limited partners. He and Lazar each held a one-third interest; the remaining third was split between the two other limited partners. Lazar, who leads the firm’s economic research team, is a co-founder of ISI Group, where she worked for more than 20 years, according to a firm biography.
The case is Trahan v. Lazar, 19-cv-1131, U.S. District Court, Southern District of New York (Manhattan).
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