SS&C Advent Faces Second Licensing Lawsuit

Echoing claims in an earlier suit filed by SEI, Arcesium is accusing SS&C Advent of abusive and anti-competitive licensing practices.

A second licensing abuse lawsuit targeting Advent Software and SS&C Technologies, collectively referred to as SS&C Advent, has been filed in a federal court, this one in the U.S. District Court for the Southern District of New York.

Filed by a financial services back-office technology firm known as Arcesium, this second lawsuit echoes claims included in an earlier lawsuit filed by SEI Global Services. With some variations in the particulars, the plaintiffs in both lawsuits suggest the SS&C Advent defendants are engaging in anti-competitive, abusive licensing practices.

“Defendants and Arcesium compete to provide middle- and back-office post-trade technology support solutions to asset managers, notably to major hedge funds and hedge fund administrators,” the Arcesium complaint states. “This lawsuit challenges defendants’ attempts to prevent and destroy competition in this industry. Defendants’ actions violate the anti-trust laws, the laws against interference with business relations and Arcesium’s contractual rights.”

The lawsuit suggests that the SS&C Advent defendants offer accounting software known as Geneva that is widely used by asset managers. As the plaintiffs explain, Arcesium and SS&C Advent entered into a “reseller agreement” in 2015, allowing Arcesium to resell Geneva by integrating it into the solutions that Arcesium offers its customers. According to the complaint, the 2015 agreement eliminated the need for Arcesium’s customers to negotiate directly with SS&C Advent for their own licenses to use Geneva.

“It also allowed Arcesium’s customers to take advantage of Arcesium’s superior post-trade solutions while relying on Arcesium for service and support of Geneva,” the complaint states. “Crucially, the 2015 agreement grants Arcesium robust rights to continue providing Geneva and support for Geneva to its existing customers, should the 2015 agreement expire or be terminated. The continuation rights were and are business-critical for Arcesium and its customers, because changing from one accounting software solution to another is extremely difficult and disruptive for an asset manager.”

Such a change would disrupt not only the customer’s portfolio accounting, but also its ability to perform post-trade tasks that draw on the customer’s accounting information, according to the plaintiffs. The continuation rights “thus provide a critical contractual guarantee to Arcesium and its customers that they can avoid such difficulty and disruption.”

The complaint continues: “Defendants’ publicly stated goal is to ‘take over the world’ and be ‘the world’s dominant platform’ for post-trade technology solutions. Consistent with that goal, defendants have adopted a strategy that seeks to undermine Arcesium’s ability to compete and would destroy Arcesium’s continuation rights. The actual and potential disruption caused by defendants’ unlawful conduct and breach of contract is enormous—for Arcesium, its customers and the market.”

With this background laid out, the plaintiffs ask the court to issue an injunction requiring the SS&C Advent defendants to perform under the 2015 agreement and specifically to respect Arcesium’s continuation rights, including, but not limited to, by providing the license keys necessary to enable Arcesium’s continued support of its existing customers. The complaint also asks the court to issue an injunction barring defendants from interfering with Arcesium’s relationships with its current customers and with its efforts to land new customers. Finally, the complaint calls for the awarding of financial damages to Arcesium based on the defendants’ alleged anti-competitive conduct and their alleged breach of the 2015 agreement.

The SS&C Advent defendants have not yet responded to a request for comment. However, in response to the previous SEI lawsuit, they suggested the suit was filed without merit, adding that SS&C Advent “abides by its contracts.”

The full text of the new complaint is available here.