Guggenheim accused of using cash from annuity unit to fund CEO's purchase of LA Dodgers

Guggenheim accused of using cash from annuity unit to fund CEO's purchase of LA Dodgers
Case charges firm with 'siphoning' funds from insurance companies it owns.
JUL 02, 2018

Guggenheim Partners is facing a class-action lawsuit claiming it defrauded annuity investors by saddling an insurance affiliate with high-risk assets and diverting cash from its insurance operations in part to pay for CEO Mark Walter's 2012 purchase of the Los Angeles Dodgers baseball team. In a complaint filed in Kansas City, Kansas, on May 22 and amended last month, Albert Ogles accused Guggenheim of deceiving customers at its insurance companies, including Security Benefit Life, from which he had bought a $145,000 annuity in July 2012. The complaint seeks triple and other damages from Guggenheim, Security Benefit Life and other defendants, according to a report by Reuters. (More: Guggenheim said to consider sale of asset management unit) The complaint charges that Guggenheim and others siphoned cash from the insurance companies they controlled for purposes including the purchase of the Los Angeles Dodgers baseball team. The complaint closely mirrors a lawsuit filed in Chicago in February 2014, which was withdrawn a day later, according to the Reuters report. Mr. Ogles said that Guggenheim's actions left the insurers in "hazardous" financial shape, and locked investors into poorly performing investments while Guggenheim promoted its self-interests. The firm has until Aug. 8 to respond in court to the complaint. "The allegations are without merit and [we] are going to proceed with a motion to dismiss the case," Guggenheim's lawyer Dan Webb, a partner at Winston & Strawn, told Reuters in an email last week. In April, Guggenheim Partners confirmed it is cooperating with an investigation of its asset management subsidiary that is being conducted by U.S Securities and Exchange Commission.

Latest News

Texas man says SEC and fund could make him pay twice
Texas man says SEC and fund could make him pay twice

A $141M judgment and a federal asset freeze collide over one shrinking pool

Osaic executives Kristy Britt and Greg Cornick to leave
Osaic executives Kristy Britt and Greg Cornick to leave

The firm's CFO and EVP of Wealth Management Solutions are the latest executives to exit the broker-dealer.

Estate planning becomes a client retention issue for financial advisors, survey finds
Estate planning becomes a client retention issue for financial advisors, survey finds

Clients are saying they would consider switching advisors if another professional offered estate planning services, according to a new Trust & Will survey.

Candidly adds AI agents for Trump Accounts, workplace benefits
Candidly adds AI agents for Trump Accounts, workplace benefits

CEO Laurel Taylor says the fintech's composable AI stack helps workers optimize dollars across Trump Accounts, 529s, 401(k)s, and other employee benefits.

BMO adds three advisors in Dallas amid Y'all Street wealth boom
BMO adds three advisors in Dallas amid Y'all Street wealth boom

The bank has swiped three private banking veterans from BNY as the city climbs the ranks of America's fastest-growing wealth hubs.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.