Jamie Dimon’s son-in-law has been caught up in an unpleasant dispute with a Texas-based power govt, who has accused him, together with private-equity big Apollo World Administration, of orchestrating a scheme to stiff the oil-and-gas driller out of his stake within the profitable firm he constructed.
Joey Romeo — a Princeton-educated buyout govt who married his Harvard Enterprise College sweetheart, Julia Dimon, in 2011 — is a part of a bunch of Apollo execs accused of luring Varun Mishra right into a partnership that finally turned bitter, with Mishra alleging he bought cheated out of $21 million, in keeping with an explosive arbitration declare Mishra filed final month.
After tapping Mishra’s experience on pure fuel and petroleum to construct an power enterprise, Romeo and different Apollo executives allegedly pushed him out as CEO — a coup that got here shortly after Mishra raised questions on thousands and thousands of dollars that Romeo had ordered be charged to the corporate’s expense accounts, in keeping with the submitting.
Folks near Apollo denied that any bills paid by Varun’s firm have been inappropriate.
The spat affords a uncommon glimpse inside not solely the rough-and-tumble world of private-equity offers, but in addition the enterprise of relations of the billionaire boss of JPMorgan Chase, who've principally saved a low profile.
Romeo, now in his late 30s, owns a $7 million, 3,825-square-foot unit in a Park Avenue luxurious tower. Situated two flooring beneath the legendary banking tycoon, the unfold is the previous house of iconic furnishings designer Vladimir Kagan, property information present.
Other than just a few marriage ceremony snaps on social media, one of many few publicly accessible photographs of Romeo surfaced in a controversial December 2013 Christmas card, wherein Dimon and his household romped round their palatial condo hitting tennis balls. In a single shot, Romeo was caught leaping barefoot over furnishings.
Romeo has been at Apollo since 2013 — and was introduced on board on the urging of the late, legendary JPMorgan dealmaker Jimmy Lee, in keeping with sources. Earlier than Apollo, Romeo had been an affiliate at GE Capital’s Power Monetary Providers enterprise.
“Jimmy known as lots of people to say, ‘Rent Joey,’” a supply with information of Apollo instructed The Submit. “Joey didn't undergo the traditional recruitment course of.”
MIshra, in the meantime, claims that Romeo bought snooty and sarcastic as their enterprise relationship steadily went south.
“Joseph Romeo may be described as an individual who always belittles you,” Mishra, a 41-year-old Indian immigrant who got here to the US as a pupil, mentioned in a written assertion to The Submit. “With out understanding me — or my immigration historical past — he commented on me that ‘Isn’t it too simple for you all to generate profits?’”
Romeo, who is called as a defendant within the arbitration declare together with Apollo and different numerous present and former staff on the agency, didn’t reply to The Submit’s request for remark.
An Apollo spokesman instructed The Submit that Mishra was “disgruntled” and that he had been fired “for trigger.” The spokesman added that Mishra had engaged six completely different units of legal professionals and filed a earlier arbitration demand, “which he voluntarily withdrew.”
“We strongly assist our staff and categorically reject Mr. Mishra’s false, defamatory and always altering allegations,” the Apollo spokesman mentioned.
Mishra instructed The Submit he withdrew a earlier arbitration declare as a result of he believed it gave him a greater probability to settle with Apollo. After that settlement fell aside, Mishra mentioned he filed the present one.
In accordance with Mishra’s declare, Apollo executives approached him in 2015 to supply a minimum of $400 million to construct out a enterprise that will finally turn out to be American Petroleum Companions. Below the settlement, Mishra would contribute Pennsylvania wells he’d amassed and function CEO on an H1-B visa whereas Apollo would supply the capital for enlargement.
However the subsequent yr, Apollo and Romeo pulled the rug out from beneath Mishra, axing a deal for APP to amass a significant pure fuel fracking firm for $360 million — solely to show round and scoop up the corporate by way of one other agency wherein some Apollo principals have been “doubtless direct or oblique beneficiaries,” in keeping with arbitration papers.
Regardless of allegedly getting shortchanged by Apollo on the fracking deal, Mishra had already dedicated his wells to the APP enterprise, in keeping with the criticism.
By that point, Mishra instructed The Submit, he observed Romeo had been approving bills for Apollo executives’ limousines and different high-end journey to be paid for out of American Petroleum. In accordance with Mishra’s go well with, Romeo was siphoning “a number of thousands and thousands of dollars” out of Mishra’s enterprise to pad the accounts of Apollo and its associates.
Mishra alleges that Romeo had directed Collin King, then APP’s chief monetary officer, to “make substantial funds to Apollo with out Mishra’s information or approval.”
“Earlier than he was fired, to my information, he by no means alleged that the corporate reimbursed bills — to Apollo or anybody else — that weren't 100% professional firm bills,” King, who now works for APP’s successor firm Excessive Highway Sources, instructed The Submit. “Romeo by no means directed me to approve any inappropriate bills, and I by no means did so.”
Mishra and his legal professional each instructed The Submit that he had certainly raised the difficulty of inappropriate bills with King and with Romeo immediately.
Mishra claims he rang alarm bells, bringing it to Romeo’s supervisor’s consideration, however his protests blew up in his face. On Nov. 7, 2019, Romeo traveled to Canonsburg, Pa., along with his boss, Olivia Wassenaar, to confront Mishra. They demanded he resign and settle for a “paltry” payout — saying in any other case “he can be terminated for trigger,” the submitting claims.
Mishra refused, noting in his arbitration submitting that he’d by no means been reprimanded or warned — not to mention disciplined — for his efficiency as APP’s president and CEO, nor had he obtained any written discover of any violations of his employment settlement.
The allegations come as Apollo is beneath a consent decree from 2016 after the Securities and Alternate Fee mentioned an Apollo senior companion improperly charged bills to sure company-run funds. If Mishra’s claims are discovered to have benefit, they might set off one other SEC probe of Apollo’s practices, sources instructed The Submit.
Ernest Badway, a companion at regulation agency Fox Rothschild, mentioned the optics of the allegations “look terrible,” however added that they’re not essentially unlawful. “Sadly, it might be misallocating bills” if Apollo companions charged journey and different outlays to APP as a substitute of the agency itself, Badway mentioned.
“The SEC has began investigations with a lot lower than this,” he mentioned. Nonetheless, Badway mentioned, SEC regulators will concentrate on who was doubtlessly harmed by Romeo and Apollo’s alleged actions; if buyers didn’t undergo any losses — and solely Mishra did — regulators is perhaps much less apt to probe the state of affairs.
In the meantime, Apollo offered APP’s property in 2020 to Quantum Power Companions-owned Tug Hill Working for round $30 million, the arbitration declare alleges. In Could of final yr, Quantum offered its property — together with the previous APP’s — to Premier Pure Sources for $6 billion, the declare alleges.
Mishra obtained round $700,000 for his APP stake after the Tug sale, however he claims he ought to have obtained $21 million based mostly on what the property resold for — together with the $10 million in capital he put up when he inked a cope with Apollo.
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