Northern Trust and Northern Trust Investments have countersued the BP North America savings plans investment oversight committees over alleged securities-lending losses in index funds, accusing the committees of possibly violating ERISA and seeking counterdamages.
In October, the BP committees sued Northern Trust in U.S. District Court in Chicago, claiming the firm had mismanaged four index funds — available to employees participating in BP's savings plan — that engaged in securities lending.
If the allegations in the lawsuit BP filed against Northern Trust in October “are true, (the committees) failed to fulfill the fiduciary duties that they owed to the BP plans,” the countersuit by Northern Trust said.
“Assuming that any of these allegations is found to be true in this case” — which Northern Trust denies in its filing — “the plan committees' alleged failure to obtain and understand (securities lending) information before making the subject investments or selecting them as an investment option ... constituted a primary and active breach of trust and fiduciary duty by the plan committees” and are “substantially more at fault than NTI or NTC for any alleged losses to the BP plans. Such an alleged failure by the plan committees would amount to inadequate due diligence and ... would violate the plan committees' duties under ERISA.”
Gregory T. Williamson, BP America's director of trust investments, the Americas, declined to comment. BP's U.S. defined contribution plans have $8 billion in assets.