OMAHA, Neb., Nov. 13 /PRNewswire/ -- Woodmen of the World has filed a federal lawsuit seeking recovery of $29.7 million in investments that U.S. Bank National Association lost in a short-term investment program managed by an affiliate of the bank.
The lawsuit in U.S. District Court in Omaha accuses U.S. Bank of breach of contract, negligence, breach of fiduciary duty, gross negligence, negligent misrepresentation, fraudulent misrepresentation and fraudulent concealment. It was filed after U.S. Bank refused to make good on the losses.
"Woodmen remains financially strong," said Woodmen spokesperson Steve Haack, Vice President of Marketing and Public Relations. "The losses represent less than one half of 1 percent of Woodmen's nearly $8 billion in assets. But Woodmen is committed to the responsible management of member funds and filed the lawsuit in order to live up to that commitment."
The losses came about through U.S. Bank's short-term investment program. Without Woodmen's knowledge, U.S. Bank invested a portion of the money in high-risk securities that were not the high-quality investments that Woodmen was led to expect.
In March 2008, Woodmen inquired about the safety of the investments. Although U.S. Bank knew otherwise, U.S. Bank nevertheless represented to Woodmen that these short-term investments were sound, according to the lawsuit.
"Only a few months later, U.S. Bank would perform an about-face and take drastic measures to dissolve" the fund, transferring the assets to an illiquid fund without Woodmen's consent, the suit says.
The lawsuit describes U.S. Bank's actions as grossly negligent, and says that U.S. Bank made intentional misrepresentations to Woodmen about the investments.
"At no time prior to July of 2008, and only after Woodmen was forced to sign a confidentiality agreement, did U.S. Bank inform Woodmen" that some of Woodmen's short-term investments had been placed in high-risk securities, the lawsuit says.
Woodmen is continuing to pursue other avenues to resolve this matter, Haack said.
Woodmen of the World was founded in 1890 as a fraternal benefit organization. Today, Woodmen of the World offers insurance, annuities, mutual funds, and 529 college savings plans*. Nearly 750,000 Woodmen of the World members across the country share a commitment to family, community and country. To learn more about Woodmen of the World, visit www.woodmen.org.
Life and health insurance and annuity products are issued by Woodmen of the World Life Insurance Society and/or Omaha Woodmen Life Insurance Society, a Nebraska corporation that is licensed as Woodmen of the World Life Insurance Society (Woodmen of the World) in all states and the District of Columbia, except CA, CO, ID, MT, NV, OR, UT, WA and WY. In those states, Woodmen of the World is licensed as Omaha Woodmen Life Insurance Society (Woodmen). For consumers in those states, Woodmen of the World means Woodmen. Not all products are available in all states. Not all representatives are licensed to sell all products.
*Securities are offered and processed through Woodmen Financial Services, Inc., 1700 Farnam Street, Omaha, NE 68102, 877-664-3332, member FINRA/SIPC, a wholly owned subsidiary of Woodmen of the World Life Insurance Society and/or Omaha Woodmen Life Insurance Society. Securities other than Woodmen Variable Annuity are issued by companies that are not affiliated with Woodmen of the World Life Insurance Society and/or Omaha Woodmen Life Insurance Society.
SOURCE Woodmen of the World
