Vanguard Funds Sued For Online Casino Investments
Alleged investments by Vanguard Group funds in online casinos have resulted in lawsuits against the company. Investors claim the the funds bought stock in businesses that were illegal in the United States, and when the Unlawful Internet Gambling Enforcement Act was passed in 2006, the investments became virtually worthless.
The two funds provided by Vanguard, the European Stock Index and Global Equity, both had shares in Partygaming and Sportingbet, two of the companies most heavily affected by the UIGEA and persecuted thereafter by American law enforcement officials.
Thomas Sheridan, a lawyer for the plantiffs, argues that the funds lost over $10 million when the crackdown on Internet casinos began in 2006. He aserts that Vanguard and its fund managers were negligent in putting money in an illegal enterprise.
Vanguard has reacted aggressively, stating that, while generally avoiding comment on pending litigation, the company must defend its reputation, which has been unfairly sullied by the claim.
Vanguard representatives note that neither fund exposed more than 0.036% of the total fund into the online gambling businesses. Further, the companies are both currently listed on the London Stock Exchange, not normally the place to find criminal enterprise.
Once again, the UIGEA causes trouble and confusion among financial institutions, without achieving any positive effect whatsoever. Until this misguided legislation is repealed, more tales of injustice and inefficiency among banks and other money market concerns are inevitable.
