(OnNewsToday) – Guggenheim Partners won the dismissal of a lawsuit claiming it defrauded investors in a risky annuity, and siphoned cash for purposes including to help its billionaire chief executive Mark Walter buy the Los Angeles Dodgers baseball team.
In a decision on Friday, U.S. District Judge Holly Teeter in Kansas City, Kansas, rejected racketeering claims by Albert Ogles, the Alabama man leading the proposed class action.
Teeter said Ogles failed to offer enough evidence that the annuity he bought was fraudulently designed, and said one of his legal theories was preempted by state law.
Lawyers for Ogles did not immediately respond on Monday to requests for comment. Guggenheim’s lawyers did not immediately respond to similar requests. Walter was not a defendant.
Ogles said Guggenheim deceived investors into buying a type of annuity from its Security Benefit Life unit, for which he paid $145,000 in 2012, by lulling them into thinking they could enjoy “uncapped” returns that rival annuities could not.
Instead, Ogles said the annuity performed poorly, and was simply a means for Guggenheim to generate higher fees from Security Benefit Life and promote its own interests, including to help fund the $2.15 billion Dodgers purchase in 2012.
Guggenheim countered in court papers that Ogles fell “far short of pleading with the required specificity that the Guggenheim defendants engaged in mail or wire fraud” necessary to support a racketeering claim. It also suggested that Ogles’ only alleged injury came because he believed his annuity did not perform as well as he expected.
Guggenheim recently had more than $265 billion of assets under management, according to its website. It bought Security Benefit Life in 2010. Walter is worth $3.6 billion, Forbes magazine said.
The case is Ogles v Security Benefit Life Insurance Co et al, U.S. District Court, District of Kansas, No. 18-02265.
Reporting by Jonathan Stempel in New York; Editing by Leslie Adler