Another former Roche Freedman partner, Paul Fattaruso, filed a lawsuit against the firm on Tuesday, claiming that the firm owes him hundreds of thousands of dollars in unpaid compensation and the value of his equity interest, including cryptocurrency assets. This suit follows one by former partner Jason Cyrulnik, who claims that Roche Freedman illegally ousted him from the firm in a “deplorable scheme” to avoid paying him his share of a fee payable in cryptocurrency worth more than $250 million.
Fattaruso and Cyrulnik formed the firm in 2020 along with ten other Boies Schiller litigators. In February 2021, the firm sued Cyrulnik for refusing to leave after the firm fired him for “abusive, destructive, erratic, and obstructive behavior.” However, Cyrulnik filed his own suit, claiming that the reason the firm removed him was in fact to keep his $60 million share of the cryptocurrency tokens.
Fattaruso’s lawsuit alleges that before he joined Roche Freedman, the firm’s other equity partners entered a Memorandum of Understanding which stated that compensation from certain firm clients would not be shared in relation to the partners’ equity shares. Specifically, the memorandum divided a cryptocurrency token asset between six partners, including Cyrulnik, in percentages different from their respective equity percentages.
By 2021, the cryptocurrency tokens were worth more than $250 million, according to the suit, most of that growth occurring during just five days in February. The suit claims that on the fifth day, five partners, excluding Fattaruso, held a secret meeting to remove Cyrulnik from the firm. Because Fattaruso worked closely with Cyrulnik, the partners asked Fattaruso to manage the matters that Cyrulnik had originated. According to Cyrulnik’s suit, his practice accounted for more than 70% of the firm’s profits in 2020. They then allegedly filed a federal lawsuit against Cyrulnik without Fattaruso’s knowledge. Fattaruso left the firm that March, but was not paid for his outstanding compensation or equity interest, according to the suit.
Fattaruso and Cyrulnik have since started their own firm, Cyrulnik Fattaruso.
Additional Reading
Lawyer Sues Roche Freedman for Share of $250 Million Crypto Fee, Bloomberg Law (March 23, 2022)
Ex-Boies Schiller lawyer was ousted from new firm in ‘deplorable scheme’ to keep cryptocurrency fees, suit says, ABA Journal (March 10, 2021)
Fattaruso v. Roche Freedman Complaint (March 22, 2022)
Image Credit: r.classen / Shutterstock.com