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Matthias Knab, Opalesque: Capula's Former US Compliance Chief Refiles Whistleblower Suit in New York State Court
A whistleblower lawsuit against $32 billion London-based hedge fund Capula Investment Management has taken a new turn, with the firm's former US Chief Compliance Officer refiling his case in New York state court after a federal action was dismissed on jurisdictional grounds. The complaint, filed on March 2, 2026 under New York Labor Law Section 740, alleges a sustained pattern of retaliation culminating in wrongful termination - and raises serious questions about investor protection practices at one of Europe's largest multi-strategy hedge funds.
Background: From Federal Court to State Court
Igor Abramov served as Capula's US Chief Compliance Officer and Head of US Compliance and Legal from June 2012 until his termination on July 10, 2025 - a tenure of over 13 years. He first filed suit in Manhattan federal court in November 2025. That case was dismissed on February 11, 2026, when Judge Ronnie Abrams ruled the court lacked subject-matter jurisdiction, noting that both Abramov and a Capula limited partner are based in Connecticut. The dismissal was without prejudice, and Abramov refiled three weeks later in New York County Supreme Court.
Capula Investment Management was co-founded in 2005 by Yan Huo and Masao Asai and focuses on fixed income relative value, macro, and crisis alpha strategies, primarily serving institutional investors including pension plans, sovereign wealth funds, foundations, and endowments.
Three Core Allegations
The complaint centers on three distinct compliance issues that Abramov says he raised repeatedly with senior management - and for which he claims he was ultimately punished.
Pass-through expenses. Launched in December 2021, Capula's Multi-Strategy Master Fund (MS Fund) utilized an uncapped "pass-through expense" (PTE) structure, allowing Capula to charge a wide range of operating overhead directly to fund investors - including those subject to ERISA - rather than absorbing costs from capped management fees. The rationale disclosed to investors was that this model would allow Capula to attract and retain top portfolio managers. Beginning in 2024, Abramov raised concerns that certain expenses being charged through this mechanism had not been adequately disclosed. In September 2024, he was asked to update the MS Fund prospectus to exclude artwork and private air jet travel from future PTE allocations - two categories, the complaint states, that had previously been charged to investors without disclosure. When Abramov inquired about the historical treatment of these expenses, management confirmed they had previously been allocated to the MS Fund without investor disclosure. His attempts to conduct a full historical review were repeatedly blocked, and he was told the review would focus only on prospective changes.
Cross-trading and capital allocations. In April 2025, Abramov learned of capital allocation and cross-trading practices between the MS Fund and the Capula Global Relative Value Fund (GRV Fund) that he believed had been in place for several years. He raised concerns that certain cross trades may not have equitably benefited both funds as required under SEC regulations, and that portfolio manager compensation structures created conflicts of interest - with managers potentially incentivized to favor one fund over another. When he communicated these concerns to senior management and challenged proposed disclosure language as inadequate, CEO Enrico Corsalini reportedly told him he did not understand that the current SEC "was not really enforcing anything." Abramov says he was subsequently cut out of all further communications on the matter, and his request to travel to Capula's London headquarters to discuss the restrictions being placed on his role was denied.
Test trades using investor funds. In June 2025, Capula began testing a new convertible bonds trading strategy using actual investor funds in the MS Fund. After two sequential test trades revealed significant operational failures - and before those issues had been resolved - a third trade was being planned. Abramov withdrew his compliance approval and directed a temporary halt. Paul Dersookiasian, Head of Business Management, reportedly berated him for the delay, told him the directive was outside his authority, and on July 7, 2025 explicitly threatened to submit negative survey ratings of the compliance function - and of Abramov personally - to controlling owner Yan Huo and other senior management. Abramov escalated this retaliation threat, along with the underlying compliance concerns, to CEO Corsalini and Chief Legal Officer Jonathan Bloom on July 9. The following day, July 10, Bloom and Chief People Officer Nicole DePuy terminated his employment.
A Pattern of Pressure, Not Just a Single Incident
The complaint paints a picture that goes beyond individual disagreements. Abramov alleges a years-long pattern in which management sought to pressure him into taking a more "commercial" approach to compliance. During his October 2024 performance review, he was told that if he did not modify his approach, management would restructure US Compliance to get Corsalini "off his back," and that his role and compensation would be severely diminished. A written appraisal reportedly cited his handling of the expense allocation issue as a specific negative. When he raised concerns again in early 2025, he says he was told there would be "repercussions" if he continued.
Separately, in mid-2025 Capula sought to extend Abramov's contractual notice period from 30 days to six months. Abramov requested either a title elevation - as a public sign of management's support for his independence - or a guaranteed 2025 compensation package, given the threats to his bonus. Both requests were refused. On a call on June 17, 2025, Bloom reportedly told him: "We are not going to reward someone who works against us."
Legal Claims and Relief Sought
The sole cause of action is retaliation under New York Labor Law Section 740, New York's whistleblower protection statute. The complaint seeks compensatory damages including lost wages, deferred earnings Abramov claims became due upon his termination, employee benefits, and emotional distress damages. It also seeks punitive damages on the basis that Capula's conduct was intentional, willful, and carried out "in callous disregard" of Abramov's rights, as well as attorneys' fees. A jury trial has been demanded. The case is represented by Robert W. Ottinger and Allison Marculitis of The Ottinger Firm, P.C.
Capula has not publicly commented on the refiled complaint. The firm successfully defended the earlier federal action on jurisdictional, not substantive, grounds. The state court case is now at an early stage.
Broader Context: PTE Structures Under Scrutiny
The allegations come at a sensitive moment for the multi-strategy hedge fund industry. Pass-through expense structures - in which managers charge operating costs directly to investors rather than absorbing them from management fees - have become increasingly common among large multi-strategy platforms. The model has attracted growing regulatory attention, with the SEC tightening disclosure requirements around fund expenses in recent years. Critics argue these structures can obscure the true cost of investing in a fund and create conflicts of interest when expense categories are broad or inadequately defined. The Abramov complaint, if the allegations are substantiated, would represent one of the more detailed public accounts of how such a structure may be administered in ways that fall short of regulatory standards.<
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