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Unusual Ending to Gold Suit

Simon Constable

The man who charged the World Gold Council with stealing his idea for the streetTRACKS Gold Shares(GLD Quote) exchanged-traded fund is making an unusual mea culpa.

As part of an agreement to dismiss the three-year-old lawsuit, Dan Ascani now says in a court filing that his lawsuit against the WGC "was entirely without merit.''

"I have learned through the trial of this action that my lawsuit against World Gold Council was entirely without merit and I apologize to World Gold Council for suing them," says Ascani, in the sworn statement dated Dec. 7, a copy of which was distributed by WGC.

In 2003, Ascani sued the WGC, seeking $450,000 in damages. In the lawsuit, filed in New York state court, Ascani claimed that in 2000 he met with WGC officials and told them about his idea for an ETF that holds bars of gold. He says the WGC signed a confidentiality agreement before those discussions. But WGC allegedly violated the agreement and went on to launch its popular Gold Shares ETF in 2004.

But three years later, just as the dispute was being heard by a judge, Ascani is singing a different tune.

The WGC "did not misappropriate any trade secret belonging to me" and "did not breach any confidentiality agreement with me," his statement reads. He also agrees to remove references to WGC from his Web site.

Not surprisingly, the defendants are feeling vindicated by the turn of events in the case.

"This is what we said all along, it was without merit," says George Milling-Stanley, manager of investment and market intelligence at WGC in New York.

The trial began last Wednesday in Manhattan State Supreme Court. But a day later, Justice Carol Edmead agreed to dismiss the matter.

Still, there may be more to this story. But for now the parties are keeping quiet.

"I cannot reveal the other terms of the settlement with you," Ascani says. Likewise Ascani's attorney, Charles Hecht of Hecht & Associates, also declined to comment.