Regunberg’s Father-in-Law is Big Supporter - His Firm is Mired in Investor Lawsuit & SEC Penalty

Regunberg’s Father-in-Law is Big Supporter - His Firm is Mired in Investor Lawsuit & SEC Penalty

Aaron Regunberg’s campaign for Congress got a big boost in recent weeks with the support of the political action committee (PAC) Progress Rhode Island.

The PAC is funded almost entirely by Regunberg’s father-in-law Jim Cielinski. He is a top player at a global investment firm Janus Henderson — a firm that is now facing a major class action lawsuit and was hit in the past year by the U.S. Securities and Exchange Commission.

Cielinski provided $125,000 to the Progress Rhode Island PAC, according to the Federal Election Commission.

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While Regunberg claims he is the champion of the poor and fights for the middle class, he is benefitting from his father-in-law's mega-wealth.

“Government should be working to improve the lives of the middle class, working families, and poorer people, not the folks who already have more wealth than they know what to do with. Aaron believes that progressive taxation is a critical mechanism for reducing the staggering economic and political inequality that has plagued our society and democracy,” according to Regunberg’s campaign website.

"He [Regunberg] supports The For the 99.8% Act to lower the estate tax exemption, a millionaires surtax on income over $2 million, a wealth tax applied to the fortunes of the ultra-wealthy, and the Tax Excessive CEO Pay Act," claims the campaign.

And, the Reguberg campaign is benefiting from PAC funded by his father-in-law.

Cielinski is Global Head of Fixed Income at Janus Henderson Investors — he is ranked second on the firm’s executive committee — only under the CEO. He is often the face of Janus Henderson — a firm with nearly $300 billion under management.

Cielinski can be viewed on the global financial shows providing expertise about emerging markets and expounding why his firm is investing in Russia or the benefits of the Trump presidency on the economy.

GoLocal asked Regunberg if there was an inherent inconsistency between his progressive political positions and his campaign benefitting from his father-in-law’s wealth and company’s practices.

Regunberg did not respond to repeated requests for comment.

 

Lawsuits and Enforcement Actions Against Janus Henderson

Janus Henderson was hit by a class action lawsuit in September of 2022.

The lawsuit made national news in financial publications.

Pension & Investment reported, “A participant in a Janus Henderson 401(k) plan sued the company and plan fiduciaries alleging ERISA violations because the plan contained proprietary investments even though other investments in the marketplace performed better and cost less. 'For investment management companies (like Janus Henderson), the potential for disloyal and imprudent conduct is especially high because the plan's fiduciaries can benefit the company by stocking the plan's investment menu with proprietary funds that a non-conflicted and objective fiduciary would not choose,' said the complaint filed Sept. 9 in a U.S. District Court in Denver.”

"'Defendants have not acted in participants' best interest,' said the complaint in Schissler vs. Janus Henderson. 'They have used the plan to promote Janus Henderson's proprietary investments and earn profits for Janus Henderson,' the complaint said. 'As of the end of 2021, defendants stocked the Plan's investment menu with 40 proprietary investments: 1 proprietary money market fund and 39 proprietary mutual funds,'" reported Pension & Investment.

 

 

 

In the United Kingdom, the Guardian reported in November 2019, "The asset manager Janus Henderson has been fined £1.9m by the City watchdog for mistreating and overcharging thousands of ordinary investors in a controversial practice known as 'closet tracking.'"

"The Financial Conduct Authority (FCA) said the firm’s Henderson Investment Funds Limited division failed to tell 4,713 small savers that their investments were no longer being actively managed, but continued to charge them the same fees. However, the fund did tell nearly all of its institutional investors – clients such as pension funds and banks – about the change, introduced in 2011, and even offered to continue to manage the funds free of charge," according to the Guardian.

In addition to the class action lawsuit and the British enforcement action, the U.S. Securities and Exchange Commission penalized Janus Henderson $150,000 in September of 2022. 

“Noncompliance with the custody rule creates significant risks for the safety and security of client assets,” Gurbir Grewal, director of SEC’s Enforcement Division, said in a press release.

Janus Henderson did not respond to questions from GoLocal.

On Friday, Regunberg campaign spokesperson Matt DaSilva said in a statement to GoLocal, “There are a lot of outside vehicles that are spending heavily in this race for different candidates. In Congress, Aaron is committed to fighting to ban outside spending. Our campaign was not expecting this effort, and there is no coordination taking place. We are grateful for support from a wide range of Rhode Island groups and elected officials.”