A former managing director for private equity firm TPG Capital has filed a whistleblower lawsuit against his ex-employer. According to the suit, rather than using investor fees for their intended purpose — to pay for the services of consultants and advisers — TPG regularly used the fees to pay its own employees. This practice allows for double-billing by private equity employees, who bill once as a firm employee and again as a consultant to the companies in which the firm has invested.
In his lawsuit, the whistleblower alleges that TPG executives said they would make him a partner if he was able to increase revenue by billing costs to investors and portfolio companies.
The whistleblower says he took his concerns about TPG’s business practices to his bosses, but he was allegedly met with threats. The suit states that after sending an email to TPG executives, the firm’s chief counsel responded by saying that if he had received the email directly, he would have “gutted [the whistleblower] like a carp.”
The former managing director claims he was fired minutes after sending an email to TPG’s founding partners. That email, says the suit, threatened to reveal the firm’s business practices to the Securities and Exchange Commission.
TPG already sued the whistleblower in January, claiming that he improperly disseminated company documents to various news outlets, including The New York Times.
By law, securities whistleblowers are guaranteed protection from employer retaliation. To learn more, please see Shepherd, Finkelman, Miller & Shah’s Whistleblower and Qui Tam Claim overview.