Rich settles for $4 million

Graham Rich

One of the longest-running disputes in the financial services industry has finally been settled, with Graham Rich agreeing to terms with Morningstar.

The terms of the settlement will see Rich receiving $4 million in return for releasing Morningstar from all claims in a case that has run for around six years.

Discussing the settlement with Money Management, Rich said that he was satisfied with the outcome in circumstances where the litigation had dragged on for over six years and had given rise to considerable costs on both sides.

The nature of the agreement precludes both sides from discussing the terms of the settlement, but it is estimated the costs associated with the case have run to the order of around $6 million.

The dispute arose as a result of Morningstar in 1999 investing in FPG Research Pty Ltd, a company which was founded and run by Rich, and a number of disputes which arose out of that relationship, which ultimately resulted in Rich being terminated in 2001.

In a formal statement issued today, Rich said he was pleased to be able to bring the matter to a reasonable conclusion.

Rich is now the founder and principal of research house brillient!

Joe Mansueto, chairman and chief executive officer of Morningstar, said, “We’re pleased to bring this matter to a conclusion. The settlement allows us to eliminate ongoing expense and business distraction.”

Morningstar previously recorded reserves of approximately $2.5 million (approximately US$2.1 million) in connection with this litigation. Additional details about the dispute can be found in Morningstar’s filings with the US Securities and Exchange Commission, including Morningstar’s most recent quarterly report on Form 10-Q for the quarter ended June 30, 2007.