Aspen hedge-funders in legal squabble over millions
January 15, 2016
Two hedge-funders are embroiled in a legal dispute in which one is accused of pocketing $1.2 million and racking up such expenses as renting a slopeside Aspen condo and expensing personal trips and entertainment on the company dime.
Sandeep "Sonny" Sachdeva and the now-defunct firm he co-founded, Roaring Fork Advisors, are suing Richard Cardone in Pitkin County District Court. The suit, which levies 17 claims against Cardone, seeks more than $3 million. It was filed this week.
Cardone, once a Bear Stearns executive who now runs Azure Peak Advisors in Texas, couldn't be reached for comment Thursday.
Sachdeva's suit paints a picture of what once appeared to be a promising Aspen business venture between him and Cardone.
In 2012, the two started a hedge-fund partnership, which would later be called Roaring Fork Advisors, focused on natural-gas derivative trading.
Both had extensive backgrounds in energy trading, and Sachdeva decided to use his talents in Aspen, said attorney David Bovino, who filed the complaint.
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"At one point, (Sachdeva) had made $60 million trading oil futures," Bovino said, noting Roaring Fork Advisors had managed $100 million.
The suit accuses Cardone of backing out of obligations he made to manage the Aspen office on a consistent basis, while Sachdeva focused on trading. Instead, Cardone spent much of his time in New York or jet-setting across the globe, playing golf, doing yoga and partying with friends while bringing in an unsatisfactory amount in investments, the suit alleges.
"The time he spent in Aspen and went into the Aspen office was negligible, his visits often consisted of two days in the office bookended by one day of travel on either side and, during the winter, he frequently went skiing with friends and family as opposed to do his job," the suit says.
Cardone also used funds from Roaring Fork Advisors to rent an Aspen condo for $5,000 a month. The condo wasn't used for business, the suit alleges, but rather as an entertainment spot for guests and relatives. Cardone also forbid Sachdeva from entering the condo, the suit alleges.
Meanwhile, Sachdeva suffered a near-fatal car accident with his 15-year-old daughter on May 16, 2014, the suit says. He was hospitalized for seven days with severe burn injuries. Two days after the accident, another trader, who filled in for Sachdeva at the firm, cracked his skull from a fall at his home.
Cardone was in Las Vegas at the time and didn't arrive in Aspen until three weeks later to help run the firm, the suit says.
But he didn't stay long, the suit says,
"Cardone went on a two-week trip throughout Europe with his wife and three other couples," the suit says. "It was Cardone's 50th birthday and, as he told Sachdeva, celebrating it was more important. Once again, Sachdeva handled and took care of everything."
Cardone resigned from Roaring Fork Advisors in December 2014, the suit says. He left $1.2 million wealthier and didn't reimburse the firm for any of his personal expenses that he charged to the company account, the suit alleges.
Among the claims are fraud, civil theft and defamation. The defamation claim is due to Cardone allegedly accusing Sachdeva of being a drug addict, sleeping with employees and being a "s—ty trader," the suit says.
The lawsuit is "the latest matter of business, as far as we know, before we can wind down" Roaring Fork Advisors, which hasn't done business since December 2014, Bovino said.