The US district judge Leonard Wexler has denied a motion to dismiss federal claims brought against Genworth Financial Wealth Management, its affiliates, and an executive officer, on behalf of investors in Genworth BJ Services Portfolios.

According to the complaint, Genworth and senior executive Gurinder Ahluwalia "knowingly, recklessly and/or with intent to deceive disseminated to investors materially misleading representations regarding the management of the Brinker Portfolios and Genworth's exclusive agreement with Bob Brinker."

In a statement, the plaintiffs alleged that during the period from 22 December 2003 to 22 December 2009 almost 65 per cent of the Brinker portfolios were invested in funds not recommended by Brinker, but rather in funds that paid the defendants higher administrative and service fees.

The case highlights one of the conflicts of interests that wealth management firms face, which have come to light since the financial crisis. There has been a renewed interest in how firms earn their revenues, and whether this is through fees or commission.

The parties have nine months to conduct discovery. The class and class period have not yet been certified.

The announcement was made by the New York law firms Leeds Morelli & Brown and Weiss & Lurie.