Ellen Pao, a junior partner at Kleiner Perkins Caufield & Byers, has filed a lawsuit against the storied venture capital firm, with detailed allegations about gender discrimination, harassment, retaliation and other charges at the firm. Pao, who joined Kleiner Perkins in 2005, is well-regarded in Silicon Valley and considered as thoughtful and smart by investors and entrepreneurs.

Meanwhile, in an industry where men are often the vast majority of the investors in any given firm or company, Kleiner Perkins, which has denied the charges, has been known for being a relative leader in incorporating women in high-level positions. The lawsuit, which came to light yesterday, has stunned people at Silicon Valley venture firms and related companies.

Pao’s husband Alphonse Fletcher Jr., a hedge fund manager who was highlighted by FORBES in 2009, has himself filed two previous high-profile discrimination lawsuits. Fletcher’s firm has also been in recent legal and financial troubles. A Cayman Islands judge in April ordered Fletcher’s Fletcher Asset Management to be liquidated after declaring it insolvent.

Does any of this have a connection to Pao’s lawsuit? There’s nothing to suggest a direct connection. But it provides context for Pao’s allegations.

In 1991, Harvard graduate Fletcher, who was 25 at the time, sued his employer  Kidder, Peabody & Company, charging the Wall Street bank with racial discrimination for compensating him at only half of the $5 million he said was owed to him. He claimed in the suit that he made $25.5 million in net trading profits for the firm in 1990. In the lawsuit Fletcher said that Kidder considered the amount “simply too much money to pay a young black man,” according to the New York Times. Fletcher later received $1.3 million from an arbitration panel ruling.

Fletcher went on to found his own hedge fund firm, Fletcher Asset Management, which had a complex strategy that at one time included bets on preferred shares of stocks. The fund’s strategy doesn’t appear to have worked out well (see below).

Pao and Fletcher met in the Summer of 2007 at the Aspen Institute in Colorado, where they were both fellows, according to Boston Magazine. They were married later that year, according to the magazine, and later had a baby.

Meanwhile, in another recent lawsuit, in 2011, Fletcher sued the co-op board of the Dakota, the famous New York City apartment building, and several of its co-op board members, accusing them of racial discrimination and defamation. Fletcher, a Dakota resident and former Dakota board president, had sought to buy an adjacent apartment in the building and was rejected.

The Dakota board questioned Fletcher’s finances, raising questions about his assets. In 2009, FORBES named Fletcher one of the country’s richest African-Americans with a $150 million net worth. But the Dakota’s board president said in the 2011 lawsuit that Fletcher “has virtually no liquid assets…is highly leveraged, with significant debt, [and] his current level of annual interest expense far exceeds his annual income,” according to Boston Magazine.

The questions raised by the Dakota about Fletcher included “questions over whether he had made good on his philanthropic commitments,” the New York Times reported. Fletcher has been a notable philanthropist. In 1994, Fletcher donated $4.5 million to Harvard University to create the Alphonse Fletcher Sr. Professorship, which is held by the well-known scholar Henry Louis Gates, Jr.  Then in 2004, on the 50th anniversary of the Brown v. Board of Education decision, Fletcher pledged $50 million to institutions and individuals that help improve race relations. But the Dakota questioned whether Fletcher had fulfilled his charitable commitments.

Meanwhile, last year, two of the three Louisiana pension funds that had invested a total of $100 million in Fletcher’s Income Arbitrage Fund Ltd. requested redemptions. Instead, Fletcher reportedly sent them “promissory notes.” In February, Fletcher tried to repay the pension funds with assets from other Fletcher entities, which it said were worth $136 million. But the pension funds rejected that and a judge in the Cayman Islands ruled last month that the assets, which include  stock options, were “virtually worthless,” The Times-Picayune reported.

A Cayman Islands’ judge in April ordered the hedge fund to be liquidated and said that it was insolvent on a cash-flow basis, according to the Wall Street Journal. In requesting the liquidation, the petition stated that the Fletcher fund hadn’t filed audited financial statements since 2008. A Fletcher representative told the Journal: “We are disappointed in the Grand Court’s ruling, which we believe is incorrect. The FIA Leveraged Fund is evaluating all of its options at this time, including an appeal. We remain committed to managing all of our funds in the best interests of our investors.”

In 2008, the three pension funds, the Firefighters’ Retirement System, the Municipal Employees’ Retirement System and the New Orleans Firefighters’ Pension and Relief Fund, invested a total of $100 million in Fletcher’s Income Arbitrage Fund. The firm promised an unusual 12% annual return and said that another Fletcher entity would make up the difference if returns dipped lower, the Journal and Times-Picayune reported. When pitching the pension funds, Fletcher showed them results that claimed 11 years of operations without a losing month. Fletcher in a recent year reported that he had $500 million in assets under management, but according to the Journal’s analysis had $200 million. The SEC was investigating Fletcher Asset Management, according to a July 2011 Times report.

For more on this story go to: www.forbes.com/sites/tomiogeron/2012/05/23/some-background-for-the-kleiner-perkins-discrimination-lawsuit/