Welcome to today’s episode of Laments of the Rich and RicherOnly in Greenwich edition. For years, Vinit Bodas made roughly $40 million a year as the founder of Deccan Value Investors, a Greenwich, Connecticut–based hedge fund he started in 2010 that now has about $3.5 billion under management, chiefly from university endowments. But around 2018, when Bodas was in his late 50s, he decided that his compensation wasn’t nearly enough.

In May of that year, after a visit with his friend Girish Bhakoo, who worked at a different hedge fund—Ruane, Cunniff & Goldfarb—Bodas was despondent. Bhakoo had told Bodas he was about to start a new hedge fund with $125 million of his own money. At the time, Bodas had only $30 million or so invested in the Deccan funds, and he was envious that Bhakoo had so much more to invest. To make matters worse, Bhakoo was only a junior partner at Ruane, Cunniff, while Bodas was the senior partner and founder of Deccan.

After visiting Bhakoo and hearing of his enormous wealth, Bodas “suffered emotional distress, felt nauseated, and struggled not to lose consciousness,” according to an explosive lawsuit between Bodas and John Malik, Deccan’s chief operating officer and chief financial officer of 10 years, that is winding its way through a Connecticut state court. (In his response to Malik’s lawsuit, Bodas “denied” Malik’s assertion about his reaction to Bhakoo’s wealth.)

The lawsuit further asserts Malik’s claim that Bodas, determined to rectify his wealth deficit, unilaterally decided to raid his partners’ capital accounts at Deccan, reducing their partnership percentages and then increasing his own. By allegedly swiping from his partners, instead of the roughly $40 million he would have made in 2018, Bodas made approximately $50 million, 25 percent more.

Bodas lives in Greenwich with his wife, Uma, who has been described to me as a Greenwich-socialite type. They have three children, two of whom graduated from Dartmouth after attending the Brunswick School and Greenwich Academy. (Their third child is a teenager.) During the pandemic, Bodas bought a share in a private jet. Malik, meanwhile, a former equities trader from California, lives in SoHo, in downtown Manhattan.

There is now nothing left to bind together Bodas (left) and John Malik—partners for some 15 years—except for dueling lawsuits.

Malik believed Bodas was stealing from him and his partners and that the hedge fund’s operating agreements did not allow “any individual (including the controlling person) to simply take capital from others because that person doesn’t feel rich enough.” He says he told Bodas that what he was doing to his partners was “totally wrong,” but Bodas said “it was up to him, not me,” and ignored his pleas. “I am just not making enough to continue this firm,” Bodas texted Malik in May 2018. (In a court filing, Bodas “denied” Malik’s claim that he raided his partners’ capital accounts but that in his “sole discretion” he could unilaterally change the partnership percentages whenever he wanted to do so. He also stated that he had “no record” of the text-message exchange between the two men. He also “denied” that he made $50 million, instead of $43 million.)

Malik further claimed that Bodas then instructed Malik to use his position as C.F.O. to produce “Accounting Memos,” which he included in the lawsuit filings, to “legitimize” the money he was siphoning from his partners’ accounts. (Bodas denied that he “instructed” Malik to “create” the accounting memos.)

Malik argues that he had no choice but to follow Bodas’s orders—which included transferring more than $600,000 from his own capital account to Bodas’s—because he feared he would be fired and lose his own $3.7 million annual compensation. (Bodas admitted that he recut the partnership percentages, giving himself a greater share of the profits, as was his “sole” right to do.)

And that’s just the tip of the iceberg in the increasingly acrimonious legal dispute between the two men, who were partners for some 15 years until their relationship blew up during the pandemic, resulting in a Connecticut state-court case and a recently concluded S.E.C. investigation.

In a countersuit Bodas has filed against Malik, the list of allegations is long:

  • that Malik was spending so much time on his personal business interests—including starting a small company, Icarus Lived, that provided funding for Florida real-estate projects, as well as for a nightclub and a modeling agency in New York City—that he neglected his Deccan duties, causing the fund to overpay state taxes
  • that Malik absconded with Deccan documents as he left the firm and tried to extort a settlement agreement by sending threatening e-mails using a pseudonymous e-mail address
  • that when he refused to pay Malik off, the ex-C.O.O./C.F.O. went to the S.E.C. as a “whistleblower” and started his lawsuit against Bodas and Deccan
  • that Malik leaked the existence of the S.E.C. investigation of Deccan to Bloomberg News

In his lawsuit, Bodas is also demanding that Malik return the $16 million in compensation that Deccan paid him over the years. (Malik denied all of these allegations in his response to Bodas’s countersuit.)

Back to Malik’s lawsuit, though, where his list of grievances also runs long. Malik asserts that, on top of taking money from his own partners, Bodas started to exhibit “erratic and improper behavior” in his management of the firm, specifically when communicating with two of the fund’s larger limited partners, Emory and Yale Universities.

In an April 2019 conversation with representatives of Emory’s endowment, which had invested $146 million in the Deccan funds, Malik wrote in his complaint that Bodas “lost his temper” in responding to a routine question from the Emory administrator, verbally “lambasting him” to the point where he “seemed humiliated.” A week later—“not surprisingly,” Malik wrote—Emory sent Deccan a notice that it wanted to redeem its entire investment in Deccan. (In a court filing, Bodas conceded that Emory sent a redemption notice to Deccan but “denied” Malik’s related assertions.)

Bodas made no attempt to remedy the situation with Emory and instead instructed Malik to send Emory a succinct e-mail: “[Bodas was] very upset with your meeting and your condescending attitude, and [Deccan] was going to ask you to withdraw in any case. So the timing is perfect.” (Bodas did not dispute the existence of the e-mail to Emory, but denied that he had mishandled the meeting or instructed Malik to write the e-mail.)

Bodas then allegedly proceeded to thwart a smooth and equitable redemption of Emory’s $146 million. In an April 26, 2019, text to Malik, Bodas referred to the Emory administrators as “fools,” and two minutes later texted Malik again, when questions were raised about whether Deccan’s redemption process was fair to Emory: “So figure this out and let’s just play with them. It will be fun.” (In a court filing, Bodas claimed to have “no record” of these text messages and denied the rest of Malik’s allegations regarding Emory.)

When Malik objected to the way Emory’s departure from Deccan was handled, Bodas told him that was “way too conservative” and needed to be “more practical.” Malik again believed his job was on the line. (Bodas “denied” this allegation.)

The same day, according to the settlement document between the Securities and Exchange Commission, Deccan, and Bodas, Bodas also texted Deccan’s head of trading and operations about how to handle Emory’s redemption request: “Use everything to hold [Emory] back in [one of the Deccan funds]. Anything mildly illiquid. We don’t want their withdrawal to impact our other investors.… And then take our sweet time. Hopefully 2 or 3 years … And if [Emory] hassles us we can tell them we can liquidate immediately at a 20% discount … Why should we sell in advance and have other investors bear the cost of these fools.” It was the first time an investor in Deccan did not get redeemed in full on the redemption date, according to the S.E.C.

Yale received similar treatment from Bodas after it announced, around the same time, that it wanted to redeem its $470 million from Deccan—a blow to the firm, with Yale’s investment constituting around 15 percent of the Deccan funds.

“So figure this out and let’s just play with them. It will be fun.”

Yale received its first redemption of around $180 million in June 2019, according to the S.E.C., and wanted the balance by the end of the year. Yale told Deccan it had become “less excited” about Deccan’s strategy of investing in private companies in emerging markets. According to Malik, Bodas reacted to Yale’s redemption notice in the “same unhinged and vindictive manner.” (Although the S.E.C. disagreed in its settlement with Deccan and Bodas, Bodas denied acting this way or doing anything to harm Yale’s redemption process.)

According to Malik’s lawsuit, Bodas instructed the Deccan trading desk to transfer “millions of dollars” of Yale’s holdings of stock in a private Indian company to other Deccan clients at a price 4 percent lower than what brokers were offering for the stock of the private company at the same time. (In his court filings, Bodas denied Malik’s allegation, although the S.E.C. agreed with Malik.)

On December 20, 2019, according to the S.E.C. settlement agreement, Bodas texted Deccan’s head of trading and operations: “All I want is max price for portfolio and min price to [Yale]. Figure it out … Get [Yale] done [at the lower price].” (Bodas claimed not to have this text message.) Malik concluded that Bodas’s chief desire was for Yale to “be harmed.” (Bodas denied this assertion.) He again tried to urge Bodas not to shortchange Yale, a shortchanging he figured ended up costing Yale around $700,000.

“Again certain that Bodas clearly knew that what he was doing was both unethical and harmful, I informed Bodas that I thought the decision was a terrible one and that I was uncomfortable with it,” Malik wrote in his lawsuit. “Bodas again reacted angrily, stating to me that I was ‘so paranoid’ of anyone finding out that there was a better market price for [Yale’s] position, that I needed to be ‘more business minded,’ and that ‘another COO’ would not bring up the same concerns.” (The allegations of shortchanging Yale and Emory were the focus of the S.E.C. investigation into Bodas and Deccan. Bodas “denied” Malik’s assertions about how he acted.)

Bodas asked Malik to delete their texts from his phone and watched as he thought Malik did so. He also instructed Malik to turn off his phone’s cloud services so that their text messages would not be saved. (Although the S.E.C. found that Bodas did direct at least one Deccan officer to permanently delete their text messages, Bodas “denied” doing so in his court filings in the legal dispute with Malik.)

In the verdant town of Greenwich, Connecticut, envy can be a tough feeling to stave off.

In an affidavit filed in his lawsuit, Malik worried that Bodas was trying to “double-cross” him and “pin” on him Bodas’s bad behavior. (In the end, Malik kept copies of the texts from Bodas and included them in his legal filings.)

In February 2020, recognizing that his relationship with his boss was damaged beyond repair, Malik finally decided he had no choice but to leave Deccan, despite the financial blow he would suffer in the form of losing his nearly $4 million–a–year in compensation.

Exit Strategy

Bodas tried unsuccessfully to talk Malik out of resigning, according to copies of text messages between the two men. “I will not accept your resignation,” Bodas texted. “You can’t leave.”

Not only did Malik leave—he blew the whistle to the S.E.C., which opened an investigation and issued subpoenas for document production throughout 2020. They interviewed Bodas—now represented by George Canellos, the head of litigation at Milbank and a former co-director of enforcement at the S.E.C.—three times between January and April 2021.

On August 3 of this year, the S.E.C. reached a settlement agreement with Deccan and Bodas. In the agreement, they cited four violations of securities law—which, among other things, “prohibits engaging in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client”—and noted that Bodas “caused” each of them. One investor in the Deccan funds told me “an S.E.C. enforcement action is always bad.”

Bodas got off lightly, all things considered. Deccan was “censured” and required to pay a fine of roughly $1.1 million, and Bodas was personally ordered to pay $500,000. The S.E.C. also ordered him to “cease and desist” the fraudulent behavior in the future and to hire a “compliance consultant” to analyze and report on Deccan’s “books and records” and “client and investor redemptions.”

“We are pleased to have resolved this matter and will continue to focus on our mission of creating long-term value for our clients,” Deccan said in a statement provided by a lawyer who worked on the S.E.C. case.

“I will not accept your resignation,” Bodas texted Malik. “You can’t leave.”

“I was privileged in my career to serve many of the most reputable endowments and foundations in the world,” John Malik said through his attorney. “I respected their trust in me by being an honest steward of their investments, and my commitment to those principles will never change.”

Despite S.E.C. findings and a pending lawsuit that suggest otherwise, Bodas at least once in the recent past has claimed that he himself has been a victim. In a January 2020 e-mail to the late David Swensen, the highly respected chief investment officer of the Yale endowment, about trying to settle Yale and Deccan’s differences after a month of squabbling, Bodas wrote about “this extraordinarily traumatic time for me.”

He continued, “I had imagined that there was a risk that some day I may be deemed to be incompetent, but never in my wildest imagination [did I think someone would] question my honesty and integrity or accuse me of intentional disregard to portfolio risks. The day I came back after meeting you [at Yale], I actually thought I was going to have a heart‐attack. I even considered shutting down my business as the very foundation of everything I have worked so hard to achieve in my life was shaken.”

But he didn’t close Deccan when he could have—and probably should have—because, well, that’s only rarely in the playbook of a fancy Greenwich hedge-fund manager. Now he has a new challenge: how to explain his S.E.C. censure, and the reasons for it, to the men and women who run the university endowments that are still invested in Deccan. Talk about having a little fun.

William D. Cohan is a Writer at Large for AIR MAIL and the author of such best-selling books as The Last Tycoons, House of Cards, and The Price of Silence. He is a founding partner of Puck. His new book, Power Failure, will be published in November