Ramaswamy, Strive Sued Over Business Practices

Lawsuits claim GOP presidential hopeful and firm he founded pushed workers to break rules.

Jeff_Benjamin
|
Wealth Management Editor
|
Reviewed by: Lisa Barr
,
Edited by: Ron Day

GOP presidential hopeful Vivek Ramaswamy, along with the firm he co-founded, ETF issuer Strive Asset Management, is being sued by former employees who claim they were pressured to violate securities laws and were misled about the company’s finances. 

In a suit filed Aug. 8 in Union County, New Jersey, which also names Strive Co-Founder Anson Frericks, a former employee claims that she was, among other things, pushed to use sales material “that improperly promised future investment returns” and to instruct new workers to begin selling before the company had their securities licenses in its possession.  

Another suit filed in Kansas in June by a former employee claims he was misled about the capitalization of the Columbus, Ohio-based asset manager, according to Bloomberg News.  

Ramaswamy, 38, is running as a Republican on a pro-business, anti-ESG platform, rising to third in some polls despite having no political experience. He entered the ETF industry as a deliberate disruptor with the flagship Strive U.S. Energy ETF (DRLL), which holds stakes in ExxonMobil Corp. and Chevron Corp. DRLL has $358 million in assets under management and a 12-month return of 13%, but is up less than 1% in 2023. 

Ramaswamy left Strive, which he founded in 2022, earlier this year to focus on his candidacy.

Ramaswamy's Strive to 'Vigorously Defend Itself'

"Strive intends to vigorously defend itself,” the company said in an emailed statement. “Beyond that, it is our policy not to comment on active litigation." 

Lawyers representing the two lawsuits didn’t return calls seeking comment. 

The employee, Joyce Rosely, also claims she was fired for raising concerns about sexual harassment. The suit said Ramaswamy and Frericks “unlawfully engaged in securities sales activities despite the fact that neither has a securities license. Defendant Frericks called and e-mailed individual investors, while defendant Ramaswamy unlawfully engaged in securities sales activity on Twitter.” 

Strive runs 10 ETFs managing $969.7 million, according to etf.com data

The firm filled Ramaswamy’s role as CEO in May when Chief Investment Officer Matt Cole added CEO to his title. 

Adam Gana, a securities lawyer with Gana Weinstein, said these kinds of civil suits almost always result in some kind of settlement. 

“When you become a candidate for president and start rising in the polls, you are invariably going to be under a microscope,” he said. “Litigations like these happen to businesses, some more than others, but when you’re running for president, they get more attention.” 

 

Contact Jeff Benjamin at @[email protected] 

Jeff Benjamin is the wealth management editor at etf.com, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.


Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.


Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.