An investigation has begun into the activities of banks and financial
services companies that offer their own mutual funds to employees.
Frequently employee 401(k) funds are the largest investor in the
employers own mutual funds. The appropriate amount to be
invested in mutual funds according to the Institute of Fiduciary Studies
for a 401(k) is no more than $30 million because of the high fees
associated with mutual funds for management fees and other charges.
Investors, including 401(k) plans, when all of the participants assets
are aggregated, if the assets total more than $30 million have the
financial clout to negotiate with money managers directly for lower
fees.
 When banks and financial services companies offer their own mutual funds
to participants in 401(k) plans they establish for their employees, and
they do not negotiate lower management and other fees they are violating
their fiduciary duty to act solely in the 401(k) participants best
interests.
According to an expert in securities, the Institute for Fiduciary
Studies has set the limits for the appropriateness of mutual funds as an
investment vehicle for 401(k) participants at an aggregate of $30 million. He notes that
some of these larger financial institutions have 401(k) plans with
hundreds of millions of dollars invested in mutual funds, which is far
more than appropriate for an investor to invest in mutual funds. These
companies make money from offering their own mutual funds to employees,
with higher fees, which places them in a conflict of interest and in
violation of their fiduciary duty under a federal law known as ERISA.
Under ERISA fiduciaries have a duty to act solely in the best interests
of plan participants, and not in their own interest. By not investing in
stocks managed by the same money managers that are managing the mutual
funds at a much lower cost, the fiduciary is not acting in the best
interest of plan participants but in their own interest.
The investigation is centered around the possibility of a class
action lawsuit against certain banks and financial companies that offer
their own mutual funds to employees when the 401(k) plan has more money
than is appropriate investment in mutual funds. Current or past
employees of banks and financial companies that offer their own mutual
funds to plan participants may be eligible to join a class action
lawsuit against such firms.
Employee 401(k) Mutual Fund Articles
Mutual Fund ERISA: Braden vs. Wal-Mart
A class action lawsuit filed in late March alleges that Wal-Mart, the giant discount retailer, violated mutual fund ERISA statutes and cost its 401(k) employee plan holders and investors $60 million in unnecessary expenditures by purchasing expensive mutual funds, when cheaper alternatives were available.
Mutual Fund ERISA Lawsuits in the News
More and more frequently, news of mutual fund ERISA lawsuits are making their way into the headlines. Lawsuits are being filed by employees who argue that the assets in their 401(k) plans and other retirement savings plans are being grossly mismanaged by plan fiduciaries.
Mutual Fund ERISA Lawsuits: DOL Gets Involved
In a quiet move that many people may not have noticed, the US Department of Labor recently weighed in on the 401(k) lawsuit filed against Deere & Co. The move could have wide-ranging implications for other companies and employees involved in mutual fund ERISA lawsuits.
Mutual Funds and ERISA: Watch for the Signs of Greed
The recent settlement in the New York Life Insurance Co. (NYL) with regard to the alleged mismanagement of pension funds, aptly illustrates what can sometimes happen when investors aren't paying strict attention.
Mutual Fund ERISA: By Law, You're in the Driver's Seat
It seems like a nice, little cozy deal that on the surface promises convenience. Indeed, it seems to make just so much sense...you're a bank with a large employee base, with a large number of people enrolled in, and holding 401(k) retirement plans.
New York ERISA Suit Ends in Settlement
Eight years of litigation has passed and a settlement has finally been approved. A judge in federal court granted a settlement of $14 million in a class action lawsuit against New York Life Insurance Co. (NYL) that violated the Employee Retirement Income Security Act of 1974. The lawsuit was filed by employees who alleged the company mismanaged pension funds by investing in its own mutual funds to make them look more profitable.
Mutual Fund ERISA: Some Companies Charging High Fees
Employees who work for financial companies that offer their own mutual funds may be able to file a lawsuit against their employer, alleging their money was improperly invested in their company's own mutual funds.
Mutual Fund ERISA: Individuals Can Sue for Losses
A landmark Supreme Court decision that could have wide-ranging implication for mutual fund ERISA lawsuits was handed down earlier this week.
Supreme Court Upholds Individual's Right to Sue Over 401(k)
You could forgive James LaRue for being ticked with the administrators alleged to have mis-managed his 401(k) investments after the value of his holdings plunged $150,000. His instructions were to move his portfolio into safer investments.
Investors Investigate Mutual Fund ERISA Lawsuit
Employee 401(k) Mutual Fund Legal Help
If you are an employee or former employee of a bank or financial services company that offered it's own mutual funds as an investment option to its 401(k) plan participants, please click the link below to send your complaint to a lawyer to evaluate your claim at no cost or obligation.
Last updated on Sep-15-11 |
ARTICLES AND INTERVIEWS
Mutual Fund ERISA: Braden vs. Wal-Mart
 Springfield, MO: A class action lawsuit filed in late March alleges that Wal-Mart, the giant discount retailer, violated mutual fund ERISA statutes and cost its 401(k) employee plan holders and investors $60 million in unnecessary expenditures by purchasing expensive mutual funds, when cheaper alternatives were available [READ MORE]
Mutual Fund ERISA Lawsuits in the News
Dallas, TX: More and more frequently, news of mutual fund ERISA lawsuits are making their way into the headlines. Lawsuits are being filed by employees who argue that the assets in their 401(k) plans and other retirement savings plans are being grossly mismanaged by plan fiduciaries. One of the most common complaints is that the fiduciaries are acting in the best interests of the company, rather than in the best interests of plan participants [READ MORE]
Mutual Fund ERISA Lawsuits: DOL Gets Involved
 Washington, DC: In a quiet move that many people may not have noticed, the US Department of Labor recently weighed in on the 401(k) lawsuit filed against Deere & Co. The move could have wide-ranging implications for other companies and employees involved in mutual fund ERISA lawsuits [READ MORE]
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