The divorce is getting ugly.

In the wake of a hard-hitting WSJ expose of escalating tensions between Pimco co-founder Bill Gross and departing CEO Mohamed El-Erian, Gross is facing a new media crisis.

In a story run this morning by Reuters, Gross indicates to the reporter that El-Erian "is trying to undermine me."

The kicker: to support his claim that El-Erian was reaching out to newspapers, Gross allegedly indicated to Reuters that he had been monitoring El-Erian's phone calls.

A Pimco spokesperson then categorically denied that Gross made any of these claims.

It was the disputed quote heard around the world, gaining the attention of the IBTimes; Business Insider; Management Today; FT Alphaville; MarketWatch; the WSJ, and SeekingAlpha.

According to the Reuters article, the drama is starting to unnerve investors. This quote from the story sums it up nicely.

"I've never seen Bill and Pimco scrutinized like this before. This is the most attention I have seen on them," said Eric Jacobson, Morningstar senior analyst who has covered Pimco for nearly two decades. "A couple of high-profile stumbles and mediocre showings, coupled with some outflows - and with no identified successor for life after Bill - clearly has some investors on edge."

According to a statement from Pimco's parent Allianz, El-Erian is staying on as an advisor to Allianz's board on economic and policy issues.

Presumably, Allianz is going to do everything it can to make sure these two don't bump into each other in the hallway during any firm functions.  

Edited by: Tommy Fernandez


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