New York Life Settles Self-Dealing Allegations
New York Life Insurance Company has settled a 401(K) lawsuit accusing the company of self-dealing in its 401(k) plans. The case involved a MainStay-branded S&P 500 index mutual fund that plaintiffs believe was retained out of the insurer’s self-interest even as participants saved less money than they would have if they had been able to invest in non-proprietary funds that were less expensive.
The lawsuit alleged that class members had paid about $3.9M in excessive fees. The plaintiffs accused the mutual life insurer of committing breach of fiduciary duty under ERISA.
New York Life and its subsidiaries own and run the MainStay funds.
T. Rowe Price Sued in 401(K) Lawsuit
A participant in T. Rowe Price’s 401(k) plan claims that the financial services company acted out of self-interest when putting together its retirement plan. The plaintiff, David G. Feinberg, is accusing T. Rowe Price of offering 80 to 95 in-house funds in its plan yearly since 2011.
Because of the plan selection, contends Feinberg, plan participants paid at least $20M in fees. He claims that rather than offer less expensive options, including separately managed accounts, a collective investment trust fund, or an institutional share class, T. Rowe Price offered a retail share class of its funds. He accused the company of not meeting its fiduciary duties under ERISA by preferencing its economic interests and that of its affiliates over employees’ interests.
Feinberg is seeking class action status. In his 401(K) lawsuit, he contends that plan participants would have saved at least another $12M for retirement if only less costly funds belonging to other fund companies were offered.
Other companies to have recently been accused of self-dealing included JPMorgan Chase & Co. (JPM), which because the defendant in a 401(K) lawsuit in January, as well as Morgan Stanley (MS), Edward Jones, Franklin Templeton, American Century Investments, and Neuberger Berman.
If you suspect that your investment losses are because of securities fraud, contact The SSEK Partners Group today.
New York Life settles lawsuit over alleged excessive fees in its 401(k) plans, Pensions and Investments
T. Rowe Price sued for self-dealing in its 401(k) plan, InvestmentNews, February 16, 2017