A senior executive at quantitative trading firm Vatic Labs resigned last month and sued the company, alleging it failed to pay most of a contractually guaranteed $1.5 million bonus, according to a complaint filed in Delaware Superior Court.
Rosen Kralev, the former director of trading at the high-frequency trading firm, alleges in court papers that Vatic for months blamed the missed payments on difficulties raising funds. It is the second instance in the past year of a former Vatic executive suing the firm over alleged nonpayment.
The complaints by former employees give a rare peek inside a systematic proprietary trading firm’s efforts to raise capital and expand its business.
Vatic disputes Kralev’s allegations and moved to halt the Delaware lawsuit, arguing that its operating agreement gives the company the unilateral right to compel confidential arbitration and that an arbitrator — not the court — must decide whether the claims can proceed. A judge this week granted Vatic’s motion to stay, sending the case to arbitration.
“The company rejects the allegations made by Mr. Kralev and his counsel and will address them in the appropriate forum,” Vatic told Business Insider in a statement through its attorney.
Kralev’s attorney declined to comment.
“Funding difficulties”
Vatic, founded in 2014 by Jump Trading alum James Chiu, has over the years hired top quant talent from firms like Citadel, PDT, and Two Sigma. The firm started out trading futures with its own capital, but in recent years, Vatic had sought to launch a hedge fund and expand beyond ultrafast trading into statistical arbitrage strategies commonly deployed by quant hedge funds.
That initiative fizzled. The firm managed no client assets as of August 2023, according to a regulatory filing, and it terminated the registration of its hedge-fund vehicle with the Securities and Exchange Commission in 2024.
It continued its proprietary trading activities, however, raising $45 million in equity in mid-2024 at a $270 million valuation, a former senior executive alleged last year in a separate suit against the firm.
Chiu hired Kralev several months later in 2024, offering him a $350,000 salary and a guaranteed $1.5 million bonus to be paid in quarterly installments over his first year, according to employment records included in the filings.
Kralev, a quantitative trading veteran with prior stints at Virtu Financial and Ritter Alpha, said he received the first $375,000 payment in January 2025 but that subsequent payments never materialized.
When the second installment came due in May, Chiu asked to delay payment, “explaining that a temporary delay would improve the Company’s financial presentation in connection with due diligence discussions with a potential investor,” the complaint states.
In the following months, Chiu repeatedly cited “funding difficulties” but assured Kralev he would be paid within weeks, Kralev alleges. During a Zoom meeting at the end of October, Chiu told Kralev that Vatic was expecting two investments totaling $50 million and would then pay out the remaining bonus, according to the complaint.
Chiu later pushed the payment timeline into December, telling Kralev in a Slack message that the fund closing had been delayed by Know Your Customer verification issues.
“Wanted to give you an update for you [sic] delayed bonus,” Chiu said, the complaint alleges. “The investor fund closing got delayed bc of KYC documents. We should get the funding the week of Dec 22 before xmas. Apologies for the delay.”
At this point, the complaint says, Kralev said he “realized that Chiu simply did not intend to pay his bonus,” and sent notice that he would resign the following month if the problem wasn’t rectified.
He resigned on January 7 and filed the lawsuit against Vatic a week later, alleging breach of contract and unjust enrichment.
Another Vatic exec alleged nonpayment last year
Kralev’s lawsuit is not the first brought by a senior former Vatic employee. Last year, former chief business officer Abiruman Subramanian sued the firm, alleging it failed to make payments for his termination, equity holdings, and fees related to capital introduction and fundraising efforts.
Subramanian said he helped raise $45 million in equity for Vatic in 2024 at a $270 million valuation and was fired shortly after the deals closed.
Months before the cash infusion, Chiu told senior personnel that Vatic was on the brink of insolvency and asked them to contribute money to keep it afloat, Subramanian’s complaint alleges:
“In February 2024, Chiu urgently demanded that Subramanian and several other Vatic managers contribute bridge capital, stating that same was needed ‘to help make payroll and save Vatic’ due to an unspecified financial crisis Holdings was facing, placing it, in Chiu’s words, ‘weeks away from insolvency.”
Subramanian contends he complied, liquidating personal investments, but said he never received “any written documentation supporting the purpose or terms of the Personal Investment.”
That case was voluntarily dismissed by Subramanian in February 2025, and it subsequently moved to arbitration, a lawyer for Subramanian said.
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