NVIDIA Corp. has agreed to pay $2.5 million to settle a lawsuit by participants in a company 401(k) plan criticizing fiduciaries’ investment selections, their strategy for choosing investments and their record-keeping practices.
A settlement document, which requires court approval, was filed Dec. 3 in a U.S. District Court in San Jose, Calif., by attorneys for participants in the 401(k) plan in the case of Tobias et al. vs. NVDIA Corp. et al. The document said the terms are “unopposed” by defendants.
Plaintiffs originally sued in August 2020 — they later amended their lawsuit — in the case of Tobias et al. vs. NVIDIA Corp. et al. alleging a series of ERISA violations. They said plan executives should have offered lower-cost investments and said executives should have issued an RFP to determine if they could reduce record-keeping expenses.
A San Jose, Calif.-based federal judge in September 2021 dismissed the lawsuit, but another U.S. District Court judge, also in San Jose, reversed the ruling in September 2023. NVIDIA unsuccessfully sought dismissal again.
The settlement was achieved through mediation, and the document noted that NVIDIA didn’t oppose the terms.
The settlement covers participants and beneficiaries who participated in the plan at any time between Aug. 28, 2014, and the date of a judge’s preliminary approval.
“Resolving the action at this juncture allows parties to avoid potentially costly and risky litigation that would deplete resources which could otherwise be used for the resolution of this action,” the document said.
The NVIDIA Corp. 401(k) Plan, Santa Clara, Calif., had $3.46 billion in assets and 15,755 participants with account balances as of Dec. 31, 2023, according to the latest Form 5500.
