Gold ETF Prompts Lawsuit

The staggering success of streetTRACKS Gold Shares(GLD Quote), the gold bullion exchange-traded fund with more than $9 billion in assets, has at least one man crying foul.

But this week Dan Ascani will get his day in court.

Ascani accuses the World Gold Council, the company that launched the ETF two years ago, of betrayal and stealing his idea. His lawsuit, which dates back to November 2003, alleges that WGC took his idea for an ETF and then developed a "suspiciously similar product."

The civil complaint alleges that Ascani had WGC sign a confidentiality agreement in April 2000 before disclosing details of his plan for a new gold-based investment product. But WGC allegedly violated that agreement when the defendants revealed the confidential information in a May 2003 Securities and Exchange Commission filing.

The disclosure "has made all of the investments relating to the ... project worthless," the complaint reads.

The case is set to kick off Wednesday before New York Supreme Court Justice Herman Cahn in a Manhattan courtroom.

Ascani boasts a history of developing innovative financial products. Among other things, he claims to have developed "unique strategies utilized by major mutual funds such as the Rydex Funds," according to a recent press release.

Ascani, who seeks damages in excess of $450,000, refused to comment. He referred questions to his attorney Charles Hecht of Hecht & Associates.