Business

Musk-Tied Investor Clashes With One of World’s Biggest Asset Managers

Published

10 months ago

May 8, 2025

Musk-Tied Investor Clashes With One of World’s Biggest Asset Managers

A prominent Silicon Valley investor is in a bitter dispute with his former employer, one of the world’s largest asset managers, accusing it of fraud and attempted bribery.

In a lawsuit filed on Thursday in California, Josh Raffaelli, who until late last year was a fund manager at Brookfield Asset Management, said the company had mistreated investors in his funds as it sought to make up for losses in other parts of its business.

The 100-page complaint is notable in part because Mr. Raffaelli has close ties to Elon Musk, the world’s richest man. That relationship enabled Mr. Raffaelli’s funds to put money into Mr. Musk’s private companies, a coveted opportunity in Silicon Valley. But among Mr. Raffaelli’s allegations is that Brookfield improperly limited the amount that he could invest in a Musk company on behalf of Brookfield’s clients.

In December, shortly after Mr. Raffaelli filed a whistle-blower complaint with the Securities and Exchange Commission, Brookfield fired him, according to his lawsuit.

“Brookfield repeatedly betrayed the trust and best interests of its investors, and then fired the employee who challenged its behavior,” said Mark Mermelstein, Mr. Raffaelli’s lawyer.

Brookfield manages more than $1 trillion on behalf of pension plans, government investment funds and financial institutions. Until January, its chairman was Mark Carney, Canada’s new prime minister.

“This suit is absolutely without merit and these baseless claims run counter to how Brookfield manages its business,” said Kerrie McHugh, a spokeswoman for Brookfield. “We will vigorously defend against this meritless suit, which was brought by a disgruntled former employee.”

Mr. Raffaelli, 45, has had a long career in Silicon Valley. In 2004, he became an analyst at what was then called Draper Fisher Jurvetson, a leading venture capital firm. At the time, Mr. Musk was on the ascent in Silicon Valley. He had recently founded the rocket company SpaceX and made an early investment in Tesla, which would become the world’s most valuable car company.

By 2009, Mr. Raffaelli was a board observer at both SpaceX and Tesla, according to his LinkedIn profile. That entitled him to attend the companies’ confidential board meetings. The proximity to Mr. Musk also gave Mr. Raffaelli the opportunity to invest his clients’ money in the billionaire’s private ventures. In Silicon Valley, that access made Mr. Raffaelli a hot commodity in his own right.

In 2017 he joined Brookfield, working out of its San Francisco office. His job was to manage a handful of funds that would invest clients’ money in technology companies. His base salary was $500,000, but his bosses told him that if his funds performed well, his total compensation could ultimately be in the tens of millions of dollars, according to the lawsuit, filed on Thursday in Superior Court in San Mateo, Calif.

In part to attract outside investors, Brookfield agreed to put its own money in Mr. Raffaelli’s funds, meaning the company’s financial interests would be aligned with those of its clients. By 2024, his funds collectively managed more than $1.75 billion, which came from pension funds, other outside investors and Brookfield itself.

Tapping his contacts in Mr. Musk’s orbit, Mr. Raffaelli arranged for his funds to invest in several of Mr. Musk’s private businesses, including SpaceX, the artificial-intelligence company xAI and the tunnel-building venture known as the Boring Company, according to Mr. Raffaelli’s lawsuit and people familiar with the investments.

But Brookfield soon encountered financial problems, according to the lawsuit. The Covid-19 pandemic had hammered the commercial real estate industry, in which Brookfield and its affiliates were major investors. Brookfield Property Partners, the asset management firm’s sister company, lost about $2 billion in 2020.

That set the stage for Brookfield to begin engaging in fraud, Mr. Raffaelli said in the lawsuit.

Short on cash, Brookfield in 2024 backtracked on some of its pledges to put hundreds of millions of dollars into Mr. Raffaelli’s funds alongside outside investors, the lawsuit said.

Around the same time, Brookfield also vetoed a proposal from an unspecified “major foreign conglomerate” that wanted to invest up to $100 million in one of Mr. Raffaelli’s funds, the lawsuit said, describing that decision as “indefensible.”

The combined result was that there was less money than expected for Mr. Raffaelli to invest. That, in turn, limited the potential upside for Brookfield’s outside clients, the lawsuit said.

Already, Mr. Raffaelli said, he had been forced to sharply reduce — from $25 million to $5 million — the amount that one of his funds planned to invest in Mr. Musk’s xAI. (The lawsuit did not identify xAI by name, but people familiar with the investments confirmed it.)

“That is like walking away from the chance to buy Facebook or Apple stock” at a bargain price, the lawsuit said. “The markets expected this investment to go nowhere but up, and that is exactly what has happened.” The estimated value of xAI has more than tripled to $80 billion over the past year.

Last summer, Brookfield informed Mr. Raffaelli that the firm was thinking of merging his funds into a company called Pinegrove Capital Partners, according to his lawsuit.

Ms. McHugh, the Brookfield spokeswoman, said Mr. Raffaelli’s funds were not performing well. Mr. Raffaelli’s lawyer disputed that, saying the funds were among the best-performing at Brookfield.

Mr. Raffaelli started looking into Pinegrove, an asset manager that was mostly owned by Brookfield. He was alarmed by what he found. He said that Pinegrove had exaggerated its capital levels by more than $100 million, making it appear financially stronger than it really was. Hundreds of institutions — including nonprofit organizations and pension funds for police officers and firefighters — had been persuaded under false pretenses to entrust their money to Pinegrove, according to the lawsuit.

Last October, Mr. Raffaelli anonymously reported his findings to Brookfield through the company’s whistle-blower website. A few weeks later, he said, he submitted a complaint to the S.E.C.

Shortly after, Mr. Raffaelli’s boss, Anuj Ranjan, told him that Brookfield’s chief executive had signed off on the decision to fold his funds into Pinegrove. According to the lawsuit, Mr. Ranjan acknowledged to Mr. Raffaelli that the move was not good for his clients but was designed to prop up Pinegrove and save money for Brookfield. Mr. Raffaelli viewed this as a violation of federal securities laws.

Mr. Ranjan did not respond to a request for comment.

The investors in Mr. Raffaelli’s funds needed to approve the Pinegrove merger. Brookfield pushed Mr. Raffaelli to pitch them on it “because his credibility would resonate better with the investors that trusted him,” the lawsuit said.

In exchange for his help, Mr. Raffaelli said, Brookfield offered to pay him an amount “way beyond” what he was currently owed. He said the head of the company’s human resources department then sent him a spreadsheet showing he could eventually be due as much as $46 million under his existing compensation agreement.

Mr. Raffaelli said he viewed that as Brookfield offering him a bribe.

The following week, Mr. Raffaelli sent the general counsel at Brookfield Asset Management the complaint he had previously sent to the S.E.C.

“As uncomfortable as this is for me, I wanted to share with you that I felt I had an obligation to blow the whistle on certain illegal conduct,” he wrote, according to the lawsuit.

Nine days later, Mr. Raffaelli said, he was fired.

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Business

Yamaha is leaving California after nearly 50 years

Published

10 hours ago

March 11, 2026

Press Room

Yamaha is leaving California after nearly 50 years

Yamaha Motor Corp. is relocating part of its operations to Georgia and selling its California assets after 47 years.

The company is the latest among a slew of businesses to relocate operations outside the Golden State to cut costs and improve profitability. Many cite high taxes and strict regulations as obstacles to doing business in the state.

Yamaha Motor Corp. U.S.A., the U.S. subsidiary of Yamaha Motor Co., has been based in Cypress since 1979. It will begin its move to Kennesaw, Ga., at the end of this year and complete the moving process by the end of 2028, the company said in an announcement.

The company’s marine and motorsports business facilities already moved to Kennesaw in 1999 and 2019, respectively. The Cypress facility currently houses corporate functions and the financial services business on roughly 25 acres, the company said.

Yamaha said it will sell all its land, offices, warehouses and other fixed assets in California. It will use a sale-and-leaseback arrangement for a temporary period to ensure a smooth transition and business continuity.

“This initiative is positioned as one of the Company’s key measures aimed at improving asset efficiency and enhancing profitability in the United States,” the company said in its announcement of the move. Yamaha “is undertaking structural reforms … in response to cost increases resulting from U.S. tariffs and changes in the market environment,” it said.

Yamaha Motor was founded in Japan in 1955 and began selling its products in the U.S. in 1960. The company got its start making motorcycles for racing and contests, and released its first boat motor in 1960. It acquired land in Cypress in 1978 and established an office there one year later.

Some companies have been vocal about their dissatisfaction with California’s business environment.

Last year, Bed Bath & Beyond’s executive chairman, Marcus Lemonis, said his bankrupt company won’t be reopening any stores in California, where it used to have more than 80 locations.

“California has created one of the most overregulated, expensive, and risky environments for businesses,” Lemonis said in a statement posted on X in August.

Also in August, In-N-Out owner Lynsi Synder announced she was moving her family from California to Tennessee, where she planned to open a new regional headquarters. In-N-Out’s California headquarters remains operational.

“There’s a lot of great things about California, but raising a family is not easy here,” Snyder said on a podcast at the time. “Doing business is not easy here.”

Tesla moved its headquarters out of Palo Alto in 2021, the same year that financial services firm Charles Schwab relocated from San Francisco to north Texas.

Elon Musk moved the head offices of his other companies — SpaceX and X — to Texas in 2024, as did Chevron, the oil giant that was started in California.

Business

Disneyland Resort President Thomas Mazloum named parks chief

Published

22 hours ago

March 11, 2026

Press Room

Disneyland Resort President Thomas Mazloum named parks chief

Disneyland Resort President Thomas Mazloum has been named chairman of Walt Disney Co.’s experiences division, the company said Tuesday.

Mazloum succeeds soon-to-be Disney Chief Executive Josh D’Amaro as the head of the Mouse House’s vital parks portfolio, which has become the economic engine for the Burbank media and entertainment giant. His purview includes Disney’s theme parks, famed Imagineering division, merchandise, cruise line, as well as the Aulani resort and spa in Hawaii.

Jill Estorino will become the head of Disneyland Resort in Anaheim. She previously served as president and managing director of Disney Parks International and oversaw the company’s theme parks and resorts in Europe and Asia.

Estorino and Mazloum will assume their new roles on March 18, the same day as D’Amaro and incoming Disney President and Chief Creative Officer Dana Walden.

“Thomas Mazloum is an exceptional leader with a genuine appreciation for our cast members and a proven track record of delivering growth,” D’Amaro said in a statement. “His focus on service excellence, broad international leadership and strong connection to the creativity that brings our stories to life make him the right leader to guide Disney Experiences into its next chapter.”

Mazloum had been about a year into his tenure at Disneyland. Before that, he was head of Disney Signature Experiences, which includes the cruise line. He was trained in hospitality in Europe.

In his time at Disneyland, Mazloum oversaw the park’s 70th anniversary celebration and recently pledged to eliminate time limitations for park-hopping, which are designed to manage foot traffic at Disneyland and California Adventure.

Mazloum will now oversee a 10-year, $60-billion investment plan for Disney’s overall experiences business, which includes new themed lands in Disneyland Resort and Walt Disney World. At Disneyland, that expansion could result in at least $1.9 billion of development.

The size of that investment indicates how important the parks are to Disney’s bottom line. Last year, the experiences business brought in nearly 57% of the company’s operating income. Maintaining that momentum, as well as fending off competitors such as Universal Studios, is key to Disney’s continued growth.

In his new role, Mazloum will have to keep an eye on “international visitation headwinds” at its U.S.-based parks, which the company has said probably will factor into its earnings for its fiscal second quarter. At Disneyland Resort, that dip was mitigated by the park’s high percentage of California-based visitors.

Times staff writer Todd Martens contributed to this report.

Business

What soaring gas prices mean for California’s EV market

Published

1 day ago

March 10, 2026

Press Room

What soaring gas prices mean for California’s EV market

It has been a bumpy road for the electric vehicle market as declining federal support and plateauing public interest have eaten away at sales.

But EV sellers could soon receive a boost from an unexpected source: The war in Iran is pushing up gas prices.

As Americans look to save money at the pump, more will consider switching to an electric or hybrid vehicle. Average gas prices in the U.S. have risen nearly 17% since Feb. 28 to reach $3.48 per gallon. In California, the average is $5.20 per gallon.

Electric vehicles are pricier than gasoline-powered cars and charging them isn’t cheap with current electricity prices, but sky-high gas prices can tip the scales for consumers deciding which kind of vehicle to buy next.

“We probably will see an uptick in EV adoption and particularly hybrid adoption” if gas prices stay high, said Sam Abuelsamid, an auto analyst at Telemetry Agency. “The last time we had oil prices top $100 per barrel was early 2022 and that’s when we saw EV sales really start to pick up in the U.S.”

In a 2022 AAA survey, 77% of respondents said saving money on gas was their primary motivator for purchasing an electric vehicle. That year, 25% of survey respondents said they were likely or very likely to purchase an EV.

As oil prices cooled, the number fell to16% in 2025.

In California, annual sales of new light-duty zero-emission vehicles jumped 43% in 2022, according to the state’s Energy Commission. The market share of zero-emission vehicles among all light-duty vehicles sold rose from 12% in 2021 to 19% in 2022.

“Prior to 2022, we didn’t really have EVs available when we had oil price shocks,” Abuelsamid said. “But every time we did, it coincided with a move toward more fuel-efficient vehicles.”

Dealers are anticipating a windfall.

Brian Maas, president of the California New Car Dealers Assn., predicted enthusiasm for EVs will rebound across California if oil prices don’t come down.

“If prior gasoline price spikes are any indication, you tend to see interest in more fuel-efficient vehicles,” he said.

Rising gas prices could be a lifeline for EV makers at a time when federal support for green cars has been declining.

Under President Trump, a federal $7,500 tax incentive for new electric vehicles was eliminated in September, along with a $4,000 incentive for used electric vehicles.

In California, the zero-emission vehicle share of the total new-vehicle market was 22% through the first 10 months of 2025, then dropped sharply to 12% in the last two months of the year, according to the California Auto Outlook.

Meanwhile Tesla, the most popular EV brand in the country, has grappled with an implosion of its reputation with some consumers after its chief executive, Elon Musk, became one of Trump’s most vocal supporters and helped run the controversial Department of Government Efficiency.

Over the last several months, Ford, General Motors and Stellantis have pared back EV ambitions.

Other automakers, including Nissan, announced plans to stop producing their more affordable electric models.

The Trump administration has moved to roll back federal fuel economy standards and revoked California’s permission to implement a ban on new gas-powered car sales by 2035.

David Reichmuth, a researcher with the Clean Transportation program in the Union of Concerned Scientists, said the shift in production plans will affect EV availability, even if demand surges.

That could keep people from switching to cleaner vehicles regardless of higher gas prices.

“This is a transition that we need to make for both public health and to try to slow the damage from global warming, whether or not the price of gasoline is $3 or $5 or $6 a gallon,” he said.

According to Cox Automotive, new EV sales nationally were down 41% in November from a year earlier. Used EV sales were down 14% year over year that month.

To be sure, oil prices can fluctuate wildly in times of uncertainty. It will take time for consumers to decide on new purchases.

Brian Kim, who manages used car sales at Ford of Downtown LA, said he has yet to see a jump in the number of people interested in EVs, hybrids or more fuel-efficient gas-powered engines.

Still, if the price at the pump stays stuck above its current level, it could happen soon.

“Once the gas prices hit six [dollars per gallon] or more and people feel it in their pocket, maybe things will start to change,” he said.