(Bloomberg) – The former head of Brookfield Asset Management’s venture capital division accused the company of falsely firing him after refusing to lie to investors.
Josh Raffaelli sued Brookfield Thursday for over $1 trillion in California Stouge Court, claiming his former employer offered him nearly $46 million to help sell a program that “benefits at the expense of investors.”
Bloomberg News reported in February that Brookfield quietly shut down the arms of Raffaelli’s leadership and was moving some of its assets and employees to an entity called Pinegrove Capital. According to the lawsuit, Pinegrove is a joint venture between Brookfield and Sequoia Capital’s wealth management division, which acquired the VC division of Silicon Valley Bank. Raffaelli did not sue Sequoia or Pinegrove.
“The set of lawsuits has absolutely no merits, and these unfounded claims are contrary to how Brookfield manages its business,” Brookfield spokesman Kerrie McHugh said in a statement. “We will vigorously defend this priceless lawsuit filed by disgruntled former employees.”
Neither Pinegrove nor Sequoia responded immediately to requests for comment.
Raffaelli claimed in his lawsuit that Pinegrove “exaggerated” the amount of funds it raised, and Brookfield also tried to deceive potential investors, including pension funds, what would mean for their portfolio of VC funding strategies.
He said he was fired shortly after he filed a complaint with the SEC internally and with the whistleblower.
Raffaelli’s lawsuit comes earlier in the New York Times, whose name comes after investments from Elon Musk’s companies, including SpaceX and Solarcity. As a Brookfield fund manager, he provided $250 million in 2022 to help Musk’s acquisition of Twitter Inc.
But Raffaelli claims that the situation established by Pinegrove due to the SVB collapse has led it to an anti-competitive deal with all major Silicon Valley venture capital firms. These agreements mean that Pinegrove is no longer able to invest directly in the company through other funds and minors. He said Brookfield provided him with tens of millions of dollars to mislead clients’ changes in strategy.
He “refused to accept bribes from Brookfield defendants in exchange for his lying to investors because he combined his venture capital funds into so-called advantages with the opposite trading strategy that it would certainly kill their investments,” Raffaelli’s attorney Mark Mermelstein,” Raffaelli’s attorney Mark Mermelstein.
According to a 100-page complaint, Raffaelli is seeking Brookfield’s monetary losses, as well as losses in past and future incomes, including bonuses and unpaid wages.
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