A lawsuit in which Guggenheim Partners LLC and three life insurance companies it controls were accused of deceiving annuity buyers and engaging in racketeering was dropped without explanation the day after it was filed.
The 105-page complaint was filed in federal court in Chicago on Feb. 11 by Clarice Whitmore and Helga Maria Schulzki. They were seeking to sue on behalf of anyone who bought an annuity from the insurers since Jan. 1, 2010.
A notice of voluntary dismissal was filed with the court yesterday by Elizabeth Fegan, a partner at Seattle-based law firm Hagens Berman Sobol Shapiro LLP, which represented the plaintiffs. The notice, which reserved the plaintiffs’ rights to sue later, gave no explanation for the about-face.
Schulzki and Whitmore alleged that Guggenheim Partners, a unit of Chicago-based Guggenheim Capital LLC, took control of Security Benefit Life Insurance Co., Guggenheim Life & Annuity Co. and Equitrust Life Insurance Co., depleted the carriers’ surpluses and eroded their reserves while continuing to market their annuities as safe investments.
The pair likened the defendants’ conduct to that of collapsed Houston-based energy firm Enron Corp., claiming they used complex accounting to create an appearance of financial strength by moving liabilities off the insurers’ books to two other entities.
Schulzki and Whitmore sought unspecified damages, which may be tripled under the federal Racketeer Influenced and Corrupt Organizations law.
Tom Mulligan, a spokesman for Guggenheim, didn’t have an immediate comment on the withdrawal. Michael Sitrick, another Guggenheim spokesman, said on Feb. 11 that the allegations were false.
“These insurance companies are properly and well capitalized, including capital and reserve requirements well in excess of all regulatory requirements,” he said in an e-mailed statement.
Attorney Steve Berman, who filed the case, said by e-mail today that he didn’t yet know if it would be resurrected.
Asked why it was withdrawn, he said, “Just rethinking a few points.”
The case is Whitmore v. Guggenheim Partners LLC, 14-cv-00948, U.S. District Court, Northern District of Illinois (Chicago).