ERISA stories
During the third quarter of 2021, 23 ERISA-related lawsuits were filed and/or updated. Each event represents the involved parties either reaching a settlement or filing an appeal, or a court decision was made. The parties involved in the ERISA lawsuits in the third quarter included four financial firms, two universities, and prominent companies such as NVIDIA Corp., Juniper Networks Inc., Kraft Heinz Food Co., American Airlines Inc. and Koch Industries. Northwestern University’s case was accepted for review by the U.S. Supreme Court.
Financial firms
- AutoZone Inc. 401(k) plan participants added Northern Trust Corp. as a defendant in an ERISA lawsuit against the company and claimed that they charged high management fees and trading costs.
- A federal appeals court upheld a lower court’s decision that favored Great-West Capital Management and Great-West Life & Annuity Insurance Co., which were sued by plan participants for charging excessive fees for advisory and administrative services.
- T. Rowe Price Group agreed to settle an ERISA suit for an undisclosed sum for allegedly offering expensive proprietary mutual funds.
- An ERISA case against Prudential Insurance Co. of America for its failure to monitor fund performance and disclose the amount of record-keeping fees was dismissed due to lack of sufficient facts to support the claims.
Universities
- The U.S. Supreme Court agreed to hear an ERISA case against Northwestern University because consensus could not be reached between lower courts and federal appeals courts regarding what is required for a case to be dismissed or to go to trial. Plaintiffs alleged that Northwestern University charged excessive fees and maintained poor-performing investment options.
- A federal appeals court reinstated ERISA complaints against New York University for its failure to maintain a prudent lineup in two 403(b) plans and ordered the lower court to review complaints based on their findings.
Other organizations
- An ERISA lawsuit against NVIDIA Corp. filed by its 401(k) plan participants for failing to offer lowest cost mutual funds and maintain a prudent investment lineup was dismissed.
- uniper Networks Inc. was sued by its 401(k) plan participants for allegedly paying unreasonably high fees for managed account services that didn’t seem to be materially different from cheaper target-date funds.
- A stock-drop lawsuit against Kraft Heinz Food Co. was dismissed. Defined contribution plan participants claimed that fiduciaries should disclose unfavorable financial information including the failure to meet the synergy goals of H.J. Heinz Co. and Kraft Foods Inc.’s merger.
- A federal appeals court upheld a lower court’s decision to reject an ERISA suit against American Airlines Inc. filed by 401(k) plan participants who claimed that the poor-performing Credit Union Demand Deposit fund was the only low-risk, income-producing investment option and a stable value fund should be added.
- Koch Industries agreed to pay $4 million to settle an ERISA lawsuit filed by its 401(k) plan participants for charging excessive fees.
Non-ERISA stories
During the third quarter of 2021, 10 stories were written on non-ERISA lawsuits that involve legal prosecution or settlements, and an additional 67 legislation and regulation stories were written.
September
- Dini Ajmani will become deputy assistant secretary at the U.S. Department of the Treasury.
- People's Bank of China banned all cryptocurrency-related transactions and services provided by offshore exchanges to prevent money laundering and excessive energy usage.
- President Joe Biden nominated Javier E. Saade, Leona Bridges and Stacie Olivares and renominated Dana K. Bilyeu to the Federal Retirement Thrift Investment Board.
August
- The Autorite des Marches Financiers fined Amundi $37.5 million for manipulating the price of the Euro Stoxx 50 Futures market.
- The U.S. Justice Department opened a probe into Allianz’s Structured Alpha funds after another investigation into Allianz launched by the SEC last year.
- DWS Group’s former head of sustainability, Desiree Fixler, claimed that the firm misrepresented its ESG investing and an investigation was launched by Germany's Federal Financial Supervisory Authority. DWS stock dropped roughly 14.5% when the news broke out.
July
- The House Financial Services Committee passed the Adjustable Interest Rate (LIBOR) Act of 2021. New contracts tied to LIBOR will cease at the end of 2021; the Federal Reserve’s secured overnight financing rate, or SOFR can be used in LBIOR contracts without the need for litigation.
- The Senate confirmed Julie Su as deputy secretary of labor.
