McCormick led ‘toxic’ work environment, according to former hedge fund coworkers

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Katina Stefanova left the Connecticut-based hedge fund Bridgewater Associates under strained circumstances. The former high-ranking executive had alleged that she’d been sexually assaulted by a senior staff member at the office, publicly humiliated and effectively pushed out of the firm while it was led by then-president of the company, David McCormick, the Republican nominee running to represent Pennsylvania in the U.S. Senate.

Stefanova’s account is detailed in an explosive book by New York Times business investigative reporter Rob Copeland, “The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend,” in which McCormick is also heavily featured.

The book, published in December 2023, describes how McCormick intimidated Stefanova at a meeting at a diner to ensure that she stayed quiet. When Stefanova protested, McCormick reportedly leaned in and said, “Maybe the issue is that you aren’t being a supportive public presence for us,” a posture and a statement she took as threatening.

“The Fund” further details many such incidents at a firm that became known for sexual harassment claims, bullying, and public shaming. McCormick led the firm as president from 2009 and as CEO from 2017 until he left in 2022 to return to Pennsylvania and run for Senate.

WHYY News recently spoke to two former employees who both confirmed much of the book’s account and added details about McCormick’s role. Both spoke to WHYY News under anonymity for fear of reprisals but wanted “to make the truth known” given the stakes of the close Senate race, as they suggested, between McCormick and incumbent Democrat Bob Casey.

A former senior executive of Bridgewater who worked directly with McCormick, confirmed to WHYY News that, under McCormick’s watch, the employees worked in “a toxic fear-based culture with a lot of intimidation, recriminations, and backstabbing.”

A different more junior employee referred to the work environment as a “dystopic science fiction novel.”

McCormick has leaned on his executive experience during his campaign, saying he’d bring his experience as a successful businessman to Washington to “reign in government spending” and “exercise fiscal responsibility.”

However, his run for Senate has also brought on a wave of criticism about his reign at Bridgewater as former employees highlight behavior that many believe that should disqualify him from holding public office.

The executive

Ever since the former executive’s first run for the U.S. Senate in 2022, McCormick’s role as the head of Bridgewater Associates has been scrutinized. Former employees describe him as a staunch defender of the firm which used non-disclosure agreements to prevent employees from discussing their experiences at the firm, including allegations of sexual harassment and bullying.

McCormick has touted his executive experience in the corporate world as a key qualification for elected office. On the campaign trail, he has also claimed responsibility for everything that happened at the firm under his watch.

WHYY News verified both of the anonymous sources’ information but is withholding their names, exact positions and specific years of service to protect their identities. Most of the information has already been well documented and vetted by other reputable news sources and “The Fund.”

The executive, who worked directly with McCormick and other executives at the firm for several years, was also able to provide additional context and could corroborate events.

WHYY News made several efforts to speak with McCormick directly about these allegations but the campaign said he was unavailable.

The inheritance

Ray Dalio founded Bridgewater in 1975, making it the world’s largest hedge fund by 2013 and himself one of the richest people in the world. Dalio has been characterized as an “intellectual” voice in the financial world, notably for his discussions and writings on broad economic issues such as the need to “reform capitalism.” He also published a book on “principles” for success in business and life.

However, Bridgewater employees have characterized Dalio as a bully of a leader who demanded absolute and unfaltering loyalty and would organize meetings to publicly berate staff.

In one such event, Dalio admonished Stefanova, one of his favorite proteges, in front of a conference room full of senior staff for being late on a project. One of Dalio’s guiding principles was that managers must be willing to “shoot the people [they] love.”

According to “The Fund,” McCormick was present for the incident and witnessed Stefanova flee the conference room in tears.

The public shamings were common, according to “The Fund” and both former employees. They were also taped, ostensibly so they could be reviewed for “training” purposes later by other employees. The junior employee watched them as part of his job, made uncomfortable by videos in which Dalio berated his employees in front of other executives, including McCormick.

“Sometimes the video would just be Ray giving people advice on how to live up to the principles but sometimes it was shaming actual people, all for the ostensible purpose of making them better,” the junior employee told WHYY News.

Dalio also instituted a strict policy of non-disclosure agreements (NDA) that went beyond sensitive information and forbade employees from speaking about any aspect of working at the firm.

Both of the former employees who spoke with WHYY News said they were required to sign NDAs multiple times. The junior employee said each was “more intense than the last one” despite the fact he did not have access to any proprietary client data or other information requiring tight security.

While Dalio may have created the culture, employees have alleged that McCormick appeared to continue the same approach.

“He did not change any of that,” the executive told WHYY News. It appeared to him that “David and Ray were very much in agreement throughout.”

Sealing sexual harassment

Bridgewater covered up several incidents of sexual harassment over the years, according to “The Fund,” various news reports and documents. In many of those cases, McCormick played something of a “henchman” with a “pretty face,” according to the junior employee.

In addition to Stefanova, another Bridgewater employee complained about a male colleague who made her uncomfortable and cornered her in a conference room late one evening, according to “The Fund.” In another incident, her boss asked her to mark a calendar of the dates she and a coworker she was dating had sex as part of an investigation into her coworker.

That woman was offered a severance but had to sign an NDA as part of the deal. As she prepared to leave, McCormick told her, according to “The Fund,” “she would be in litigation for the rest of her life” if she told anyone about the experience.

In 2017, the Wall Street Journal reported that another woman was pushed out after it was revealed that she was having a consensual relationship with McCormick’s co-CEO Greg Jensen, a married father of three. The company eventually paid the woman a settlement and she was also bound by an NDA.

In the aftermath of the #MeToo movement, Congress passed – and President Joe Biden signed – a federal law the prohibits the enforcement of non-disclosure agreements in instances of sexual assault and harassment.

“To the extent that there are people within the Bridgewater organization who are subject to an NDA that would like to speak about harassment in the workplace, that NDA is unenforceable under federal law,” David Hoffman, a professor at University of Pennsylvania Carey Law School.

However, Hoffman told WHYY News that such NDAs have a “chilling effect” on those who sign them and referred to a University of Michigan study that showed employees tend to believe that such contracts are enforceable even when they are not.

“People generally think that what’s written in a contract is enforceable regardless of whether or not they have actual legal authority to talk or not,” Hoffman added. “So often the advice is go to a lawyer, get the lawyer to give you some counsel, but lawyers are expensive.”

Nancy Erika Smith, an employment lawyer based in New Jersey who often represents women discriminated against in the workplace, says NDAs should not be used to force women to keep quiet about incidents they suffered.

“It’s an additional victimization,” she said. “It’s not even just silencing women, it’s having the person who victimized you follow you around in your life, waiting for you to say the wrong thing so that that same person, that perpetrator can victimize you again.”

Smith and some Democrats in the state have called on McCormick and Bridgewater to release their former employees from the NDAs so they can speak freely about their experiences.

The former executive told WHYY News that NDAs make sense as a way to protect the intellectual property and proprietary advantage that any organization has but that Bridgewater, in his experience, goes too far.

“You wouldn’t want people in any organization going out and talking about what’s your secret sauce or anything like that,” he said. “My opinion is the NDAs at Bridgewater were closer to creating a code of silence because they seem to apply so strongly and so strictly even to people in areas not even remotely involved in trading or trade secrets or client base trading algorithms.”

He added that Bridgewater required employees to regularly reaffirm their signatures on revised NDAs.

‘What did you know?’

The former executive added that, while “The Fund” is an “accurate portrayal” of what happened at the firm, it only scratches the surface, even referring to “frat house behavior” at off-site company parties.

McCormick, as the company head, would have been aware of most of it, according to the executive.

“It’s just a logical inference to say he had to have known a lot of what was going on,” he said. “In fact, even things probably aren’t even in [the book] because they were so closely held.”

Making a parallel with the Watergate Commission, he says he would ask McCormick “What did you know and when did you know it and what did you do?”

The former executive also points out that it’s conspicuous that women who held important roles at Bridgewater aren’t responding to the reports about how he managed Bridgewater.

“If David was that good to women in the workplace, wouldn’t you be hearing it from some really significant players?” he asks. “You would be hearing it from top leadership as well as rank and file and we didn’t, and you’d be hearing it from people that worked a lot closer with him?”

The executive added that he knows other employees who sought therapy to treat anxiety or depression.

“A lot of psychic damage was done,” he said.

The executive said he wasn’t surprised McCormick ran for office and that he and other members of the staff would joke about how McCormick was using Bridgewater to build up a war chest to make his bid. However, he added, McCormick should speak to events at Bridgewater, including the hedge fund’s relationship with China and Russia.

“I’m not saying he’s a bad man,” the executive said. “I’m simply saying, ‘What’s your stance?’ Let it be known If you’re running for office, everyone has a right to know what’s your stance on these items.”

WHYY News reached out to Stefanova and other alleged victims identified in “The Fund” and other sources but none have responded.