American Century Investments has agreed to pay current and former employees $1.5 million as part of an agreement with the U.S. Justice Department’s Antitrust Division to settle charges that it conspired with another firm not to compete for employees.
The Kansas City-based investment management firm entered into the so-called non-prosecution agreement in March, but current and former workers only recently learned they may be eligible for compensation under the agreement.
According to a Justice Department letter setting out the terms of the agreement, American Century “conspired to suppress and eliminate competition” by agreeing with another firm with “which it competes for asset and wealth management professionals … not to solicit, recruit, hire or otherwise compete for each other’s employees ….”
The other firm wasn’t identified in the letter. The illegal agreement between the two firms was in effect between March 2014 and March 2018 and limited employees' mobility and ability to negotiate for better compensation, benefits and other terms of employment, according to the letter.
The letter also says that a senior-level American Century executive was involved in the scheme. The executive was not named.
Asked about the non-prosecution agreement, a spokeswoman for American Century sent KCUR the following statement:
“American Century is committed to fair and honest competition in compliance with all laws and regulations. The corporate board of directors self-reported the activity to the Department of Justice, and the company has put more effective controls in place and strengthened processes to prevent this from happening again. The DOJ has agreed to take no further action on this matter, provided the company complies with the terms and provisions of the agreement. There was no impact to clients, holdings, accounts or investments.”
The spokeswoman said the company had no “additional information to share at this time.”
With headquarters near the Country Club Plaza, American Century has 1,400 employees and offices all over the world.
The company, originally called Twentieth Century Mutual Funds, was founded in Kansas City in 1958 by the late James E. Stowers Jr. with $100,000 in seed money. As of January, American Century had nearly $210 billion in total assets under management.
Stowers and his wife, Virginia, created and endowed the Stowers Institute for Medical Research in Kansas City, a biomedical research organization focused on genetically based diseases. The institute holds a 42% controlling interest in American Century’s parent company. Nomura Holdings Inc., a Japanese company, owns a minority interest of 40%.
Under the agreement with the Justice Department, a claims administrator has been appointed to recommend which current and former American Century employees should receive compensation payments and how much each should receive. Letters from the claims administrator notifying workers of their eligibility for payment began going out in the last few weeks.
