Class Claims Millions Lost in ‘Illegal Gambling’

     MANHATTAN (CN) – A federal class action claims Neuberger Berman Equity Funds lost $30 million it put into “illegal gambling business,” and took another $9 million in fees for this. Although the complaint does not spell it out clearly, the defendants apparently are accused of investing in Internet gambling enterprises before a federal crackdown began in 2006.

     The RICO class action also sues Neuberger Berman Management, its vice president and managing director Benjamin Segal and other top Neuberger execs.
     The defendants allegedly knew the unnamed gambling businesses in which they invested were illegal before state and federal crackdowns on them began in 2006.
     It states: “Defendants knew, or are deemed to have known, that the illegal gambling businesses in which they caused Nominal Defendant [Neuberger Berman Equity Funds dba Neubderger Berman International Fund] to invest were taking bets from gamblers in the United States through numerous publicly available sources of information, including, without limitation, news media, government sources, and information provided by the gambling companies themselves.
     “In or about 2006, federal and state law enforcement agencies began a crackdown on illegal gambling business such as those in which defendants had caused the Nominal Defendant to invest. As a result, the stock prices of all such illegal gambling businesses fell substantially.”
     Plaintiffs are represented by Thomas Sheridan III with Hanly Conroy & Bierstein.