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Tuesday, April 6, 2010, 3:34 PM

Thomas Weisel Partners Wins Breach of Fiduciary Duty Claim Against Former Director Who Joined BNP Paribas and Orchestrated En Masse Resignations

By Todd

This out of California - on April 1st, a federal judge (The Honorable Marilyn Hall Patel) found Praveen Chakravarty liable for breach of fiduciary duty to Thomas Weisel Partners in connection with his departure as a Director for Thomas Weisel Partners and his "facilitation of" the resignations of at least 18 employees, who promptly became re-employed with BNP Paribas or its affiliated company, BNP Paribas Securities (Asia) Limited. In carefully chosen words, Mr. Chakravarty admitted he served as "an intermediary of information between BNPP and his co-workers in the hope that some of them might secure alternative employment." That, according to Judge Patel, was a no-no.

Some related evidence certainly didn't help Mr. Chakravarty. Apparently before the court was an e-mail to Mr. Chakravarty from Jonathan Harris, BNP Paribas Asia's Head of Company Research. Before Mr. Chakravarty had even resigned, Mr. Harris sent an e-mail to Mr. Chakravarty's e-mail at Thomas Weisel Partners as follows:

"As we discussed, the way we'd like to take this forward is to first identify the core group of your team, I think you said about 20-25 individuals. We'd like to then work on preparing employment documents for all of them. Once you have them and all is satisfactory, we'd look to you to resign from Thomas Weisel enmass [sic]. If their [TWP's] reaction is that they'd move to shut down the remainder of the office, we can step in and offer to take over the remainder as a gesture to save them the office shutdown costs.

First step would be to get from you the list of all employees, their current comp and job descriptions. Next I'd like you to highlight the 20 or 25 key individuals, and a bit more info on their job descriptions and background. For this group, please provide an indication of what comp levels you would think about for their move to BNP Paribas. Once I get this from you, you and I can arrange for a call to talk through the info."

Editor's note: this doesn't look good. This sounds like Harris knows exactly what the "enmass" departures will do to Thomas Weisel. But, of course, Mr. Chakravarty didn't send this data to Mr. Harris, did he? Well, yes. He did. That same day he sent it, noting "you are not obligated to take the entire team. The minimum we can go with is 8 analysts and the rest are available as needed. If we close the deal with 8 analysts, me and the HR/Prod Mgmt. person quickly, then we can try to big for the office space and others." Ooops. That's not good either. Seems Mr. Chakravarty knows exactly what the "enmass" departures will do to Thomas Weisel too.

Well, you can click on the link above to read the rest of Judge Patel's decision and order but suffice it to say this one is a long way from over. We would assume Mr. Chakravarty will appeal this decision and order. If he doesn't, Thomas Weisel Partners now has a guy in pretty serious legal trouble and there's more in this case to follow.

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