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Rating:Update 1  |  Rydex Launches Defense Against Fragasso Suit Not Rated 5.0 Email Routing List Email & Route  Print Print
Wednesday, February 06, 2008

Update 1 | Rydex Launches Defense Against Fragasso Suit

Reported by Erin Kello

Rydex has fired back at the allegations outlined in Phil Fragasso's lawsuit.

In a document filed on January 25, Rydex's attorneys answered each point made by Fragasso's legal eagles in a second amended complaint that was filed on January 4. Rydex's filing also includes a counterclaim against Fragasso that asserts he breached his contract by needlessly revealing confidential information--the price, perhaps?-- related to Rydex's sale to Security Benefit.

If Fragasso, a former chief marketing officer at Rydex, is found to have breached his contract by revealing this information, it could cause his case to be dismissed, even though the information was immediately retracted in an amended complaint filed three days later.

Fragasso told The MFWire that Rydex never told him why he was terminated. He said neither the U-5 form filed by Rydex nor the letter of termination he received gave a reason.

Also, Fragasso claimed that he had requested his personnel file from the company, but the company denied to grant that request. For Fragasso to get the form, it took a letter written on his behalf from the attorney general of Massachusetts. According to Fragasso, the file was then sent to him, with the only information about his termination being what vacation pay was owed to him.

The U-5 form a serious matter, Fragasso said. "This means I can never work in the industry again," he said.

In its January 25 document, Rydex contends that, while Carl Verbencouer denies that he promised additional units to Fragasso, even if he did, it is not within his scope of authority to do so.

Even though the issue of which state has jurisdiction over the case has been decided in Fragasso's favor, Rydex still asserts that it has no physical address in Massachusetts, even if it is registered to do business there.  

Correction: An earlier version of this story incorrectly implied that venue had not yet been decided.

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