BA 385—Homework
Name: Michael Allred
Date: 7/14/2018
Topic: D.E. Shaw
ISSUE IDENTIFICATION:
D.E. Shaw is “a global investment and technology development firm with more than $47
billion in investment capital...” (D.E. Shaw) as of the first of this year. They have offices in three
different continents, North America, Europe, and Asia. The company was founded in 1988 by
David E. Shaw, and since then they have “earned an international reputation for successful
investing based on innovation, careful risk management, and the quality and depth...” of their
employees. They invest in a multitude of businesses in differing economies. The moral dilemma
the company is facing has to deal with a former employee who is claiming that they defamed
him in “internal and external communications” (Levy) as well as to the press and the public. He
is claiming that they wrongfully terminated him and says that he is merely being used as a
scapegoat at this point in time. The question at hand here for this case is “If he is found innocent
of these allegations, how is D.E. Shaw then portrayed in the public light, and how does this
affect the company’s stakeholders?”
The Executive Committee is in charge of day to day operations, while David E. Shaw is
still involved in high level investment decisions, he is detached from day to day operations. I
will be assuming the perspective of Executive Committee member and Chief of Operations,
Eddie Fishman, who is also in charge of investor relations, legal, and compliance for the firm.
IDENTIFY TRIGGERING EVENT:
The recent triggering event in the case of D.E. Shaw deals with the firm firing one of
their senior portfolio managers, Daniel Michalow, earlier this summer (June) after claims that he
allegedly acted in an inappropriate manner towards women at the firm. Michalow states that he
was wrongfully terminated and is seeking legal action against the company, saying that the
“internal communications and comments to the media defamed him” (Ecarma). He also argues
that the firm should have publicly specified that he was neither let go for this type of behavior
nor that he bridged the company’s values. Michalow was offered a sum north of $10 million to
settle this dispute and avoid suit, but he turned it down and decided to continue with litigation.
One example of this alleged misconduct follows: “The investigation was sparked after Michalow
allegedly said to a former assistant that one of the requirements for hiring a new assistant was
someone that he could “call sugar tits,” people familiar with the matter told Business
Insider” (Ecarma).
David Shaw, CEO of the firm, sent out a memo to all employees addressing the issue at
hand with them all. These people are stakeholders in the company and are directly affected by
this news. I haven’t been able to find any research related to the perspectives of the shareholders/
investors dealing with this claim as it is still recent, but I’m sure as the story develops there will
be new informat...
