Einhorn’s Greenlight Slams ‘Head of Macro’ in Fresh Lawsuit

David Einhorn

(Bloomberg) -- David Einhorn’s Greenlight Capital Inc. escalated a legal battle with a former employee who claims he was head of macro trading at the firm, alleging James Fishback was actually a poor performer who resigned ahead of being fired.

In a fresh lawsuit filed Tuesday in Manhattan federal court, the hedge fund said Fishback’s claims of being responsible for $100 million in profits and “insane” performance at Greenlight were false. It said he was never more than a research analyst with no discretion over the firm’s macro portfolio.

Greenlight sued Fishback earlier in the year, saying he was lying about being head of macro and calling that a breach of two promissory notes the firm held against him. Tuesday’s suit was more expansive, accusing Fishback of violating his employment agreement, defaming Greenlight and engaging in unfair competition. It was also the first time the firm addressed Fishback’s claims in detail and called them lies.

“Fishback made these false statements to misleadingly inflate his perceived abilities and responsibilities and to take credit for Greenlight’s track record, goodwill, and reputation,” the firm said in its suit.

Greenlight further accused him of stealing confidential information and engaging in a campaign to “harass, intimidate and defame” the fund and Einhorn, including filing frivolous litigation and threatening to disrupt its annual partners’ dinner.

‘Head of Macro’ Memes

Fishback filed a defamation lawsuit against Greenlight last year, accusing the firm of falsely telling a “preeminent family office” that was considering investing in his own fund, Azoria Partners, that he was never head of macro.

Since then, the two sides have engaged on social media, where the dispute has inspired numerous “head of macro” memes and commentary from prominent investors such as Daniel Loeb, who describes himself as “head of macro at Third Point LLC since 1995” on his X bio.

In a statement Tuesday, Fishback said, “This is a desperate ploy by Greenlight to save face with its investors after they now know the truth about (1) who was actually responsible for Greenlight’s insane macro returns and (2) the lengths to which Greenlight retaliated against me for the crime of starting Azoria Partners, a direct competitor to Greenlight. I will respond to each of their baseless allegations in detail. Stay tuned.”

Fishback said in his suit, which was dropped in January to allow the parties to proceed in arbitration, that he’s a self-taught investor who successfully ran his own hedge fund for five years before joining Greenlight. He said he started consulting with Einhorn on macro investing in early April 2019 and was offered employment with the firm as a research analyst in February 2021.

‘No Authority’

He claimed he was “an outstanding performer” from the start - earning more than $100 million in profits for the company and regularly finding “extremely profitable trades” that eventually got him promoted to head of macro. Fishback included a screenshot of an email from a Greenlight executive in May 2023 identifying him as “head of macro.”

Greenlight says none of that is true. It said it decided to terminate him for his lack of productivity, but he resigned in July 2023 when he learned he was about to be fired, according to the complaint. While he was allowed to execute some macro trades for Greenlight that Einhorn directed, the suit says, he had no authority to trade on his own.

“And, since he had absolutely no authority or discretion whatsoever over Greenlight’s macro investment portfolio, he was not responsible for generating any profits, let alone ‘over $100 million’ of profits,” Greenlight says in its complaint.

According to the firm, Fishback told Greenlight he was resigning to focus on his work with a non-profit organization but would “love to continue working with” the firm. Greenlight says he’s now pushing a story about departing due to political agreements “when it became convenient for him to do so in an effort to attract more publicity by disparaging Mr. Einhorn to build his own following and to attract interest in Azoria.”

Tesla Debate

Fishback often tweets right-wing political opinions and has appeared on podcasts with former Republican presidential candidate Vivek Ramaswamy. He has also attacked Einhorn for being wrong to short Tesla Inc., proposing on X in May that they debate the electric carmaker.

Einhorn responded, thanking Fishback for the offer but declining to debate. He said he was usually happy to do so but that “the person on the other side needs to have some knowledge about the subject.”

According to Greenlight, Fishback used this rejection “as a pretext to capture a wide audience and launch into a days-long social media and podcast tirade against Greenlight and Mr. Einhorn.” During this time, “Fishback took the opportunity he created to continue spouting lies about his ‘Head of Macro’ title, his role at Greenlight, and his responsibility for Greenlight’s success,” the firm said in its suit.

According to the suit, Fishback threatened to stand outside Greenlight’s partner dinner and hand out letters containing its strategies and calling into question its macro investing strategy when he was told he couldn’t attend.

Greenlight is a value-investing fund. Earlier this year, Einhorn said the fund was forced to adjust its approach as the growth of passive investing and algorithmic trading has led to “fundamentally broken” markets.

In the first quarter of this year, Greenlight gained just 4.9%, trailing the S&P 500 Index’s nearly 11% return. Last year the fund was up about 22%, while the index rose 26%.

The case is Greenlight Capital Inc. v James T. Fishback, 24-cv-4832, US District Court, Southern District of New York (Manhattan).

--With assistance from Hema Parmar.

(Updates with background on Greenlight. A previous version of this story corrected the date of Fishback’s resignation in the 10th paragraph.)

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