Apollo Global Management scores success against ex-employees now part of insurance venture

Two are discovered as having violated the code of ethics

Apollo Global Management scores success against ex-employees now part of insurance venture

Insurance News

By Terry Gangcuangco

Private equity group Apollo Global Management has emerged victorious in the arbitration case involving two of its former employees who are now part of insurance venture Caldera Holdings.

Imran Siddiqui, one of the two people who formed the new company, was described by the arbitration ruling as a former “very important partner” at Apollo who, by 2016, was working on what ultimately became Caldera ahead of his resignation in early 2017. Caldera came to life in July of that year.

Ming Dang, meanwhile, was working full-time as an Apollo principal when he started to work with Siddiqui and Caldera co-founder Stephen Cernich on the Bermuda-incorporated entity. 

“Apollo has a Code of Ethics,” stated arbitrator Mark E. Segall. “Both Siddiqui and Dang were employees of Apollo Management L.P. throughout their tenure at Apollo, and that entity paid their salaries and issued them W-2s. Becoming limited partners in Apollo carry vehicles neither changed their basic employment relationship nor did it relieve them of their obligations and duties under the code.

“Both Siddiqui and Dang participated in trainings and certified their compliance with the code on an annual basis. Siddiqui conceded that he was bound to comply with the code, but Dang made the ridiculous claim that he did not know whether he was bound or not, and his counsel argued that as a limited partner he was not bound by the code, an argument that is belied by the language of the code itself and the testimony by several other witnesses on this subject at the arbitration hearing.”

Segall noted that the code sets forth minimum standards that are expected of all Apollo employees. These include protecting business-sensitive information such as financial information about the group and its clients.

The arbitrator added: “Beginning in mid-2016, Siddiqui and Dang began to engage in conduct that violated both the letter and the spirit of the Code of Ethics. Starting in July 2016 and continuing regularly thereafter, Siddiqui, while an Apollo partner, began sending internal Apollo reports, decks, and analyses from his personal Gmail account to the personal email accounts of Cernich, [Thomas] Daula, and Dang. There are at least five such examples from July 2016 through January 2017.

“Information from these documents was incorporated into decks and models Caldera was using to solicit potential investors to invest in Caldera. There are at least four examples of this. Around the same time Dang began working surreptitiously on these matters and began using his fiancé’s Gmail account for that purpose. Dang was involved actively in efforts to solicit Apollo investors to do business with Caldera going forward. Siddiqui bought Dang a laptop for his use on these matters.”

Daula was a chief risk officer at Apollo’s insurance company affiliate Athene Holding. According to the arbitration document, he was involved early on in the venture but no longer had any meaningful involvement by some point in 2017.

Meanwhile it was also highlighted that “many active steps” were taken by Siddiqui and Dang to conceal their involvement. As per the code, engaging in an outside business activity requires the approval of Apollo’s chief compliance officer. Neither Dang – who in 2017 was spending as much as four to five hours per day on Caldera matters – nor Siddiqui sought the required approval.

“At the same time that Siddiqui was working actively on an Apollo bid for FGL, which was a public company, he, with the assistance of Dang, was working on Caldera’s efforts to acquire FGL,” added Segall. “Siddiqui even went so far as to, in effect, grant Dang access to FGL’s virtual data room. Another company (a Blackstone-controlled entity) was the winning bidder, but this episode demonstrates how both Siddiqui and Dang were working at cross-purposes with their employer.

“Pursuant to the terms of the limited partnership agreements that Siddiqui and Dang had signed, they were not permitted to engage or participate in any competitive business.”

Apollo has been awarded damages against Dang in the amount of $1 million; compensatory damages against Siddiqui and Caldera in the amount of $75,000; as well as punitive damages against Siddiqui in the amount of $150,000.

“We are pleased with the arbitrator’s decision and believe it fully vindicates our position regarding the conduct of Mr. Siddiqui and Mr. Dang,” commented an Apollo spokesperson in a statement sent to Insurance Business. “We will continue to take any and all necessary steps to protect the trust and integrity of our business, our clients, and our investors.”


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