] is about to shell out $5.5 million to end a class-action lawsuit over a leveraged index mutual fund. Last week a federal judge in San Jose gave final approval
of a settlement of Rafton v. Rydex Series Fund
could not immediately reach a spokesperson for Guggenheim or attorneys with Sparer Law Group
, the lead plaintiffs' law firm, for comment on the settlement.
The case stems from the performance woes of the Rydex Inverse Government Long Bond Strategy Fund
]. Two years ago Guggenheim Partners bought Rydex' then-parent, Security Benefit, and last year Guggenheim created Guggenheim Investments by combining its former Claymore, Security Benefit and Rydex asset management businesses into one [see MFWire.com, 9/21/2011
Sparer first filed the suit two years ago, accusing Rydex of failing to adequately disclose that the fund's performance tracks the inverse of the relevant index on a daily basis, making it less-suitable for longer hold-times. The two side proposed the settlement in July 2011.
Stay ahead of the news ... Sign up for our email alerts now