Vanguard settled Just Invest lawsuit weeks before Altruist deal

Vanguard's move to buy Altruist, the fund giant’s second-ever acquisition, comes just weeks after the asset manager settled a lawsuit stemming from its first acquired company. 

Delaware court documents show Vanguard’s litigation with the shareholders of Just Invest was settled on July 29, coming less than a month before yesterday's shocking move to buy RIA custodian Altruist for $4.6 billion in cash. Vanguard initiated the sale, as Altruist wasn't seeking a buyer, according to Axios. 

The terms of the settlement were not disclosed. Just Invest, which sold direct indexing strategies to RIAs, was bought by Vanguard in 2021 to mark Vanguard’s first acquisition since its inception in 1975. The founders of Just Invest, which managed $1 billion in assets at the time of its sale, alleged in a July 2025 lawsuit filing that “the acquisition was intended to be an insurance policy rather than a good faith effort to generate new revenue,” as it accused Vanguard of misconduct to reduce performance payments tied to Just Invest. 

The lawsuit claims Just Invest co-founders Jonathan Hudacko, Vijay Rao, and Alan Cummings were terminated in “retaliation and without cause” by Vanguard in June 2024 after raising concerns of the diminished payouts and misconduct around their transaction. After buying Just Invest, Vanguard rebranded the platform as Vanguard Personalized Indexing Management. 

"Vanguard is a great company with a lot of talented people and they strive to learn from everything,” Hudacko, who now runs AI tax planning startup Worthy, told InvestmentNews.“Given their commitment to the long term, I would expect Vanguard to play significantly in the custodial services market going forward." 

Eric M. Davis, a judge for the Superior Court of the State of Delaware, ordered a voluntary dismissal with prejudice of the case on August 7. The court docket report shows that Plaintiffs moved to compel the deposition of former Vanguard CEO Mortimer “Tim” Buckley in June 2026, but the case settled before the court ruled on the motion. Buckley retired as CEO and chairman of Vanguard in 2024.  

Both of Vanguard’s only two announced acquisitions have been for fintech startups serving the RIA industry of independent financial advisors. Whereas the Just Invest founders exited Vanguard and its product has since been rebranded, Altruist is expected to “operate as a standalone business, retaining its leadership, brand, advisor focus, and distinct operating model under Vanguard’s ownership,” according to a press release announcing the sale.  

“Competition, in custody and wealth services, ultimately benefits end clients, and the Vanguard - Altruist announcement should give advisors greater comfort in having choices for their clients,” added Hudacko. 

Vanguard has been a minority investor in California-based Altruist since 2020. Former Vanguard chairman and CEO Bill McNabb serves on Altruist's board of directors. Vanguard CEO Salim Ramji wrote in a LinkedIn post announcing the Altruist acquisition that 74% of surveyed Vanguard investors said they’ll want human financial guidance in the next two to three years. 

“Since its inception, Altruist has operated on the premise that providing independent advisors with advanced technology will enable them to do their best work and bring high-quality advice to more people,” Altruist founder and CEO Jason Wenk said in a statement. “With the backing of Vanguard's trusted investment expertise and resources, Altruist is well-positioned to scale our operations, empowering more advisors to grow their business and deliver exceptional outcomes to their clients.”