July 24, 2023
- COURT: D. Conn.
- TRACK DOCKET: No. 3:23-cv-00978
Hedge fund manager GWA LLC and its founder George A. Weiss was hit with a proposed class action claiming the entirety of its retirement plan is invested in alternative, proprietary investments including its flagship Weiss Multi-Strategy Partners hedge fund.
The lawsuit, filed Monday in the US District Court for the District of Connecticut, claims the entirety of the company’s $103 million retirement plan is invested in two proprietary investments: the Weiss Multi-Strategy Partners (Cayman) Ltd. hedge fund and a mutual fund that largely replicated the hedge fund’s strategy.
This “highly unprecedented” decision to invest the entire plan in alternative investments is contrary to generally accepted investment principles and exposed the plan to “enormous concentration risk,” former GWA employee Beth Andrew-Berry alleged in the complaint. It also caused the plan to significantly underperform a well-balanced retirement portfolio, according to the complaint.
Andrew-Berry, who seeks to represent a class of about 187 plan participants, charges the company with using the retirement plan to “prop up” the hedge fund at the expense of workers’ retirement savings. She also accuses the company of using the investment as an opportunity to pocket fees that were “substantially above average.”