A high-stakes legal battle has erupted between Walleye Capital and former volatility arbitrage head Geoff Tennican, highlighting the intensifying tensions hedge funds face when top talent exits to launch rival ventures, according to a report by Bloomberg.
Tennican, who led Walleye’s volatility arbitrage business for over a decade and claims to have generated over $1bn in profits for the firm, is suing Walleye in California state court, accusing the $11bn multi-strategy hedge fund of enforcing an “overtly illegal” non-compete clause and withholding $50m worth of proprietary algorithms and intellectual property he says he developed while at the firm.
The dispute centres around Tennican’s new venture, Racer Software LLC, which is preparing to begin trading. Walleye, in a separate FINRA arbitration, alleges Tennican breached restrictive covenants by soliciting employees to join his firm and is seeking to block him from competing or collecting an ongoing “tail payment” – expected to be worth several million dollars.
Tennican, who reportedly earned more than $100m in compensation at Walleye and was a key contributor to more than $200m in profits in 2022 alone, argues that California’s courts are hostile to non-compete enforcement and that the hedge fund is retaliating to stifle competition.
Walleye, founded in 2005 and led by Will England, has been pivoting to focus more tightly on volatility, quant, and long-short strategies after cutting its credit, commodities, and macro teams earlier this year amid broader cost pressures.
Tennican alleges that following England’s elevation to CEO in 2023, he was marginalised and eventually ousted despite contributing to the firm’s long-term success. Walleye, in turn, described him as a poor fit for a leadership role, citing absenteeism and a lack of alignment with the firm’s growing scale and demands.
