Gundlach finishes testimony amid juror flap

Star bond fund manager Jeffrey Gundlach concluded four days of testimony on Wednesday amid questions about his contact with two jurors in the case.

After court adjourned Tuesday afternoon, Gundlach got into an elevator with two jurors who were talking to each other, according to accounts provided to the judge by both Gundlach and one of the jurors. Gundlach said he told the jurors I feel bad for you guys, after thinking they were talking with him.

Los Angeles Superior Court Judge Carl West ultimately decided that it was a minor mishap, according to a transcript of an in-chambers discussion.

In his four days of testimony on the witness stand, Gundlach provided plenty of details of a declining relationship with his former employer Trust Company of the West. But Gundlach, who was alternately diplomatic and testy, also made it clear he never told his colleagues to take TCW data.

The high stakes trial has given a rare glimpse into the inner workings of investment firms and the big personalities who run them.

Gundlach denied in court that he requested his co-workers gather anything we might need from TCW, countering testimony earlier in the trial from Gundlach's co-defendant, Cris Santa Ana.

Santa Ana, a member of the Gundlach's mortgage-backed securities group at TCW, is now chief risk officer at DoubleLine.

Jeffrey asked for contacts, contracts, board of director contacts, copies of the red books which had the trade orders, holdings, Santa Ana testified last week. And I think he made a blanket statement, something to the effect, 'and anything else you might think we would need.'

But on Wednesday Gundlach told jurors that we didn't copy any TCW code or systems to the best of my knowledge.

TCW fired Gundlach in December 2009 and sued him a month later, accusing him of stealing trade secrets, plotting to form a new company using TCW proprietary information and gutting the firm of its entire mortgage-backed securities team.

Gundlach fired back with a counter-lawsuit, alleging his former employer owed him hundreds of millions of dollars in compensation.

In the weeks following his termination, Gundlach went on to form DoubleLine Capital, along with three of his co-defendants in the case. Roughly 45 TCW employees, largely from the mortgage-backed securities group, followed.

After testimony concluded for the day, the judge asked a juror who was in the elevator to describe what happened. The man said he told a second juror that he felt bad for him, because he had a bad back.

But Gundlach thought they were talking to him.

I wasn't going to say anything to him but -- (TCW says) I'm the meanest weirdo in the world, said Gundlach, who told the judge in a separate meeting. I don't want to stonewall the guy.

The judge admonished the jurors and Gundlach against having contact with each other.

In previous days of testimony, Gundlach had told jurors that he felt increasingly frozen out of TCW, where he was chief investment officer and a member of the board.

If you fire me you're going to blow up this firm, Gundlach recalled warning TCW CEO Marc Stern. You're going to blow up the business.

He also described positive feelings about his time at TCW.

I was running a big business. I was making a lot of money, he said on Tuesday. I was happy. I didn't want to end it.

Gundlach could also be blunt. At one point on Wednesday, Gundlach told TCW attorney John Quinn that, with respect, you don't know what you're talking about, as Quinn drew a diagram of how mortgage-backed securities work on a display board for the jury.

The case in Superior Court of California, County of Los Angeles is Trust Co of the West v. Jeffrey Gundlach et al,

BC429385.