(Reuters) – Hedge fund Bridgewater Associates was found by a panel of arbitrators to have “manufactured false evidence” in a case in which the company attempted to prove that its former employees had stolen trade secrets.
The Financial Times newspaper first reported the findings from a court filing, which was made public Monday.
Bridgewater Associates had started the case against two former employees, Zachary Squire and Lawrence Minicone, with the claim that they breached their contracts and misappropriated trade secrets.
The hedge fund, founded by billionaire Ray Dalio, was found to have “filed its claims in reckless disregard of its own internal records, and in order to support its allegations of access to trade secrets, manufactured false evidence,” court documents made public on Monday showed.
“We conclude that Claimant [Bridgewater] did not have a reasonable basis for filing its claims of misappropriation of trade secrets or disclosure of confidential information as to Squire or Minicone,” according to the documents, which quoted the findings of a panel of three arbitrators of the American Arbitration Association.
The hedge fund failed to identify the alleged trade secrets with specificity, the panel’s findings showed.
Bridgewater Associates also accused the two former employees of unfair competition after they founded a hedge fund themselves, a charge which the arbitrators said was brought in “bad faith.”
Squire was not immediately available for comment.
Bridgewater Associates, which did not immediately respond to a request for comment on Monday, managed $138 billion in assets as of April.
The hedge fund co-founded by Squire and Minicone, Tekmerion Capital Management, has about $60 million in assets under management.
(Reporting by Sabahatjahan Contractor and Kanishka Singh in Bengaluru; Editing by Aurora Ellis)