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U.S. Appeals Court Affirms Judgment Against 401(k) Plan Fiduciaries for Excessive Recordkeeping Fees

On March 19, 2014, the U.S. Court of Appeals for the Eight Circuit (the “Appeals Court”) issued its highly anticipated ruling in the case of Tussey v. ABB, Inc., affirming a Missouri trial court’s $13.4 million judgment...more

The Teflon Fiduciary: Could Your U.S. Adviser Avoid Responsibility For Bad Advice?

Ronald Reagan was referred to years ago as “the Teflon President” because voters never seemed to hold him responsible for his administration’s missteps. A significant decision on fiduciary status has just been issued by the...more

Judgment Reduced, but the Importance of Monitoring Plan Investments Reaffirmed

On March 19, 2014, the Eighth Circuit Court of Appeals upheld one of the first excessive fee rulings in favor of retirement plan participants. Two years ago, in Tussey v. ABB, Inc., et al., No. 06-4305 (Mar. 31, 2012), a...more

Retirement Plan Fee Litigation Finds Its Way to North Carolina

Over the last few years, we have seen a significant increase in litigation involving the fees paid by retirement plans. However, until recently, no major litigation had occurred in North Carolina. On March 12, 2014, one of...more

District Court Relies on Fee Disclosure Regulation to Dismiss Complaint

A federal district court in New York last month dismissed a class action complaint brought by a company sponsoring a 401(k) plan. The plaintiff, in Skin Pathology Associates v. Morgan Stanley, alleged, among other claims,...more

In Fuller, Eleventh Circuit Affirms Dismissal of Claims Challenging Financial Services Company’s Use of Proprietary Products in...

In a recent Eleventh Circuit case challenging, under ERISA, the use of proprietary funds in a financial services company’s own retirement plan, the court affirmed dismissal of the claims. It held, in Fuller v. SunTrust...more

Fidelity wins the high fee battle, but loses the war

Often time the newspaper will have big headlines on the front page when somebody gets busted, but a small paragraph when that same person gets cleared of all charges. That’s the nature of the newspaper business; if it bleeds,...more

Two law school professors and their 401(k) study

There is a tendency to shoot the messenger because folks don’t like the message. I ought to know. Whether it was in college, law school, or working at a third party administrator, I was the messenger of some terrible news....more

This Week In Securities Litigation (Week ending March 7, 2014)

The Supreme Court was the focus of securities litigation this week. Oral argument was presented in the long running Halliburton case where the Petitioners are seeking to rewrite the rules for bringing securities fraud class...more

New York District Court Dismisses Putative ERISA Class Alleging Illegal Kickbacks

Sometimes in the rush to meet Rule 23(a) and (b)’s requirements, what gets overlooked is whether there is any underlying claim in the first place. In a refreshing opinion, the Southern District of New York disposed of a...more

Fiduciary Breach Claims Barred by ERISA’s Six-Year Statute of Limitations

The Eleventh Circuit recently dismissed a participant’s fiduciary breach claims against SunTrust’s 401(k) plan fiduciary committee members on the ground that the claims for imprudently selecting certain investment options was...more

View From McDermott: Conflicting Review Standards in Executive Retirement Plan Benefit Claims—Is There Really a Difference?

Under the Employee Retirement Income Security Act, retirement plans generally come in two flavors – (i) retirement plans qualified under Section 401 of the Internal Revenue Code (the Code) and (ii) executive retirement plans,...more

U.S. Supreme Court to Review “Presumption of Prudence” that Favors Fiduciaries of ERISA Plans that Hold Employer Stock

The Supreme Court has agreed to hear the case of Fifth Third Bancorp v. Dudenhoeffer, in which the Sixth Circuit Court of Appeals, in response to a motion to dismiss, declined to adopt a presumption of prudence in favor of a...more

Oops! CalPERS Reportedly Violates Insider Trading Policy Again

Jon Ortiz, who writes The State Worker blog for The Sacramento Bee, recently reported that the California Public Employees Retirement System has again violated its insider trading policy by purchasing shares in an initial...more

SEC and DOL Reach $21 Million Settlement with Adviser Over Alleged Failure to Disclose and Correct Trading Errors and Improper...

The Securities and Exchange Commission (the “SEC”) and Department of Labor (“DOL”) reached settlements with Western Asset Management (the “Adviser”), a registered investment adviser and subsidiary of Legg Mason Inc., under...more

SEC Sanctions Adviser for Failing to Inform ERISA Clients of Improper Investment Allocation

The Securities and Exchange Commission sanctioned an investment adviser for allowing some of its ERISA plan clients to invest in private placements, even though the issuer specifically restricted investments by ERISA plans. ...more

Former BGC Senior Executive Banned by FCA Due to Concerns Over His Fitness and Propriety

On January 29, the FCA published a final notice regarding Anthony Verrier, a former inter-dealer broker at BGC Brokers LP. The FCA has adjudged Mr. Verrier not to be a fit and proper person due to concerns it had over...more

SEC Charges Investment Adviser With Improper Conduct in Two Proceedings

The Commission filed two settled administrative proceedings involving Western Asset Management Co., a subsidiary of Legg Mason, Inc. One centered on the failure of the firm to promptly disclose to clients that a coding error...more

Court’s Award of $3.8 Million Raises Questions About the Scope of ERISA Remedies

The U.S. Court of Appeals for the Sixth Circuit has affirmed an unusually large award of $3.8 million in a case involving the denial of long-term disability benefits. In Rochow v. Life Insurance Company of North America, No....more

Make sure your Plan Service is more than just a typical gimmick

A year or so ago, a good friend of mine who is an ERISA §3(38) fiduciary won a case from a disgruntled broker who claimed that all 3(38) services was just marketing. A 3(38) fiduciary that does a competent job and assumes...more

Regions Financial Agrees to Pay $22.5 Million to Settle ERISA Stock-Drop Litigation

According to a December 18, 2013 motion for preliminary approval, Regions Financial Corp. has agreed to pay $22.5 million to settle an ERISA stock-drop litigation pending in the Western District of Tennessee. Plaintiffs...more

Supreme Court to Decide Applicability of the “Prudence Presumption” in ERISA Stock Cases: ESOP and 401(k) Plan Sponsors and...

Introduction - In Fifth Third Bancorp v. Dudenhoeffer, the U.S. Supreme Court will decide whether investments in employer stock are entitled to a “prudence presumption” under the Employee Retirement Income Security Act...more

Supreme Court to Address Presumption of Prudence for ERISA “Stock Drop” Cases

The Supreme Court agreed on December 13, 2013 to review an issue critical to ERISA “stock drop” cases and important more generally for ERISA individual-account plans that invest in employer stock....more

Supreme Court Picks Up ERISA Stock-Drop Case: What’s Next?

In what circumstances should you be permitted to invest your retirement savings in your own employer’s stock? We have blogged before about an ERISA class action pending at the Supreme Court regarding when plan fiduciaries...more

Courts Disagree over Jury Trial Right in ERISA Fiduciary Cases

Federal district courts in Missouri and Vermont have come to opposite conclusions regarding a right to jury trial with respect to fiduciary breach claims brought under ERISA section 502(a)(2). Applying the Supreme Court’s...more

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