In a separate case, Josh Raffaelli, a former partner at Draper Fisher Jurvetson, has sued Brookfield Asset Management. He claims that they conspired to commit wire fraud and violated the Hobbs Act by participating in bribery. Raffaelli’s ties to Silicon Valley and other investments in companies founded or co-founded by Elon Musk have been well-cataloged. He alleges that his termination from the firm was in retaliation for his whistleblower complaint to the Securities and Exchange Commission (SEC).
Brookfield Asset Management is the largest of the firms on the list, with $1 trillion in assets under management (AUM). They have denied each and every one of Raffaelli’s allegations. The suit focuses on claims that the company mismanaged losses in real estate from the pandemic. Raffaelli’s proposition is that Brookfield severely mishandled the losses. He says they didn’t live up to the promises of their investments in Musk’s companies.
Raffaelli’s had a huge career in the hip corridors of Silicon Valley. This experience has helped him to advise leading companies directly connected to Musk, like SpaceX, xAI, and the Boring Company. His class-action complaint alleges that Brookfield Asset Management should have purchased common stock in these appellants’ companies. This is even though Raffaelli had legally acquired the right to purchase those companies. This Joint Board failure, he contends, took a major hammer to his own investment strategy and returns that would have accrued.
As a result, in February Brookfield quietly shuttered the venture capital subsidiary overseen by Raffaelli. Then they transferred all the assets his unit managed into a different department within the firm. After the dissolution, according to Raffaelli, he suffered retaliation due to his whistleblower conduct. Because of this deviation, he was sent home and immediately fired from the company.
The suit provides a rare look at the growing rifts cannibalizing Brookfield Asset Management. It shines a light on their investment strategies throughout the pandemic. Raffaelli’s accusations raise questions about accountability within the big investment houses as they deal with churning economic waters.
As for Brookfield Asset Management’s defense against Raffaelli’s accusations, stout denials of wrongdoing on behalf of Brookfield Asset Management have never broken rank. The firm has made a push to highlight its commitment to ethical business practices and transparency in its operations.
