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Sculptor Capital Management accuses Dan Och of having something of a messiah complex when it comes to the hedge fund he founded and which was formerly named for him. Indeed, there is certainly something of the divine in Och’s self-conception, insofar as in his retelling of the Sculptor story, he cannot be held to the same standards as mere mortal non-founders. The Africa-wide bribery scandal that unfolded under his leadership may have turned the former Och-Ziff’s shares into pink sheets in all but name, but depressed stock prices under his successors are unacceptable. He may have once offered the firm’s helm to his kids’ former waterskiing instructor, but it is unforgiveable that someone else should have done so. He may have given said former waterskiing instructor, Jimmy Levin, $300 million, some of it from his own pocket, but he’s apoplectic that Sculptor’s board would now pay him half that.

And he may have looked past allegations of sexual assault against Levin—no doubt in part because those allegations appear to have been pretty comprehensively disproven—in championing Levin, promoting him and eventually proclaiming him his heir—but surely no one else can be allowed to do the same.

[In 2015] Och learned of the allegation against Levin following media inquiries. At the time there was the backdrop of a broader Education Department investigation into Harvard’s handling of sexual assault claims on campus.

The firm’s chief counsel reviewed the school’s report on the allegations against Levin and shared its findings with the board, which was comfortable with Harvard’s exoneration.

As must have been Och, because not only did he not relieve Levin of his leadership of Och-Ziff’s credit business, but two years later, in February 2017, promoted Levin to co-chief investment officer, gave him the nine-figure pay package and made clear Levin would succeed him as CEO. By the end of that year, however, Och was having second thoughts. In his most recent filing in his lawsuit against Sculptor ostensibly about Levin’s current, albeit smaller, nine-figure compensation arrangement, Och says he suddenly had “concerns about elevating Mr. Levin to the role of CEO,” specifically stemming from the then-15-year-old allegations he’d known about for nearly three years and which hadn’t stopped him from promoting, paying and promising Levin the whole kingdom.

Unsurprisingly, Sculptor has a different, less heroic take on Och’s change of heart.

By 2016, Och-Ziff -- then one of the largest hedge funds with assets approaching $50 billion -- was buffeted by its own scandals…. As 2017 progressed, negotiations over Och’s departure intensified. The board and some executives wanted Och to give up even more ownership and forgo future payments to shareholders to bolster the balance sheet. Och resented the move and blamed Levin for pressuring the board, people with knowledge of the situation said, though he later gave in to both demands.

In late December, the independent directors voted to move ahead with the CEO transition to Levin. Och refused and the company told clients on Dec. 23 Levin wouldn’t be promoted.

Even more unsurprisingly, this fairly accords with Levin’s own memories of that time—and he’d really prefer not to be in a blood feud with his blinded-by-rage-and-hatred former mentor.

The 39-year-old declared he wants his former boss Dan Och to “end this feud he continues to pursue” after Och brought up a “personal issue” from Levin’s past in a court filing last week….

Levin said in a statement Tuesday that in 2002, when he was 19, he was “falsely accused of sexual misconduct” at Harvard University. “Unlike some of these situations, the allegation did not involve the question of consent – rather, the alleged conduct did not occur.”

He said he brought the matter to the attention of the firm and its directors in 2015, and that after a review, he “received unconditional support, including from Och,” who was then CEO….

“My relationship with Och changed in late 2017 when he became extremely angry with me,” Levin said.

In the wake of the firm’s settlement with regulators over a bribery scandal in Africa, Levin supported efforts “to restructure the firm’s governance and finances in ways that would have resulted in Och ceding his unilateral control of the firm,” according to the statement.

Och Dredges Up Levin’s ‘Personal Issue’ in Hedge Fund Fight [Bloomberg]
Sculptor CEO Levin Says He Wants Feud With Och to End [Bloomberg]

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