Compass iTech filed a lawsuit against eVestment for allegedly leading a “disruptive and destructive campaign” against the company and its data entry tool, ProFusion, following failed acquisition talks, said J.P. Hervis, Compass spokesman, in an e-mail.
The lawsuit, which was filed in U.S. District Court in West Palm Beach, Fla., earlier this month, alleges that eVestment's “campaign” against Compass began after failing to acquire Compass and its ProFusion product in early 2014.
Mark Scott, eVestment spokesman, said eVestment officials believe Compass’ claims are unfounded and that the company plans to file its own lawsuit in the next 48 hours.
ProFusion helps money managers organize and upload their financial data to research database firms like eVestment so it can be reviewed by potential investors. eVestment offers a similar tool, Omni, which Compass claims in the lawsuit is less effective than ProFusion.
eVestment interfered with money managers’ use of the ProFusion tool, using methods such as “hiding connection links and implementing verification codes that would slow down and make ProFusion data uploads more difficult,” the lawsuit alleges.
The lawsuit further claims that eVestment representatives told Compass customers the company had committed “illegal acts” within the eVestment database, that the acts would be reported to federal authorities and threatened to stop servicing Compass customers if they continued to use Compass’ data entry product.
“(Compass) hasn’t been contacted by any federal authority,” said Richard P. Gagnon, Compass president, in a telephone interview.
“While we are limited in what we can disclose at this time, we can say there is a much broader story here than what Compass is claiming, and we are looking forward to the facts being revealed,” eVestment’s Mr. Scott wrote in an e-mailed statement. “Compass fails to mention that, over a period of years, Compass was using log-in credentials that were not its own to gain unauthorized access to eVestment’s proprietary analytics systems and confidential information — systems and information that are in no way related to the data services it provides. The decision to restrict Compass’ access is based solely on their actions and is in no way an attempt to discourage competition.”
Mr. Gagnon said eVestment announced the launch of Omni 2.0, a newer version of its Omni product, around July and that the timing of eVestment’s actions is “interesting.”
The lawsuit alleges that eVestment’s actions have damaged Compass’ relationship with some of its clients.
Compass seeks preliminary injunction against eVestment and damages in excess of $1 million.
Mr. Gagnon said Compass isn’t just fighting for its rights, but the rights of investment managers who “deserve to have access to multiple vendors in this space.”
