BTG International and certain BTG executives agreed to pay $560,000 to settle a class-action lawsuit alleging violations of the Employee Retirement Income Security Act, documents filed Aug. 20 in U.S. District Court in Philadelphia show.
The suit, by plaintiff Ramon Diaz on behalf of participants in the $60 million BTG International Inc. Profit Sharing 401(k) plan, alleged that the defendants forced the plan "into investments that charged excessive fees" benefited its record keeper, John Hancock USA.
According to the complaint, filed April 17, 2019, the plan sponsors allowed John Hancock "to receive excessive and unreasonable compensation" through direct and indirect fees paid by the plan as well as subadvised accounts both managed and not managed by John Hancock.
The defendants were also accused of larding the plan "with excessively expensive subadvised accounts — to the exclusion of superior alternatives — which in turn paid John Hancock out of the excessive fees they collected from plan investments," according to the suit.
Neither Donald R. Reavey, a partner in the law firm Capozzi Adler who is counsel for the plaintiffs, nor spokeswomen for BTG International and John Hancock could be immediately reached for comment.
