A 401(k) plan participant has filed a class-action lawsuit against Caesars Entertainment Corp., Las Vegas, and Russell Investments, alleging the company and the money manager breached their fiduciary duties in the investment management of the plan.
The lawsuit, filed May 19 in U.S. District Court in Las Vegas on behalf of plaintiff Maggie Thomson, alleges Caesars Entertainment breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 by outsourcing the money management of its 401(k) plan to Russell Investments in 2017.
The filing said that Russell Investments transferred all investment options to its own proprietary funds, resulting in more than $100 million in lost investment returns to date.
The plaintiff seeks recovery of the plan's losses, the prevention of "further mismanagement of the plan" and "other appropriate relief," the filing said.
Paul J. Lukas, Kai H. Richter and Brock J. Specht, partners at Nicholas Kaster, attorney for the plaintiffs, could not be immediately reached for comment.
As of Dec. 31, 2019, the Caesars Entertainment Corp. Savings & Retirement Plan had $1.6 billion in assets, according to its most recent Form 5500 filing. As of that date, the plan's investment options lineup consisted of nine individual collective investment trusts managed by Russell, a Russell-managed target-date fund lineup, and one short-term investment fund managed by State Street Global Advisors.
A company statement emailed by Russell spokesman Steve Claiborne said: “We believe this lawsuit is without merit, and we intend to vigorously defend the firm against these allegations.”
An unsigned email from Caesars Palace said the company does not comment on pending litigation.
