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Summary of the Investigation
This class action complaint, filed on April 5, 2017, alleges that the BlackRock 401(k) Plan fiduciaries violated their duties under the Employee Retirement Income Securities Act (“ERISA”) by investing employees’ 401(k) savings almost exclusively in BlackRock proprietary funds. As a result of this corporate self-dealing, plan participants incurred excessive layered fees on poor-performing investments within their retirement accounts. This suit seeks to recover $60 million in losses sustained by the plan participants through excessive fees and underperformance.
Summary of the Claims
Underperformance: The BlackRock 401(k) Plan has approximately 9,700 participants and $1.5 billion in assets. The complaint alleges that BlackRock Fund investments underperformed as compared to less expensive comparable funds. The complaint alleges that prudent and loyal fiduciary should and would have removed these funds from the Plan. Moreover, given BlackRock’s enormous presence in the financial marketplace, Plan fiduciaries also failed to use their immense bargaining power to secure better performing and lower cost investments for participants.
Layering Funds: The complaint alleges that the BlackRock proprietary funds offered to employees in the 401(k) Plan were layered to funnel assets into other BlackRock funds. This layering of funds meant that Plan participants were charged additional fees at each layer, thereby eroding their returns. The complaint alleges that this practice of layering funds provided BlackRock with ill-gotten financial gain at the expense of Plan participants--a direct violation of ERISA.
This lawsuit was brought on behalf of all participants in and beneficiaries of the BlackRock Retirement Savings Plan from April 5, 2011 through the date of judgment. Any individual Defendants are excluded from the class.
Status of the Litigation
The class action complaint was filed on April 5, 2017 in the Northern District of California and was assigned to Judge Haywood S. Gilliam, Jr.
Whom to Contact for More Information
If you are a member of the proposed class or if you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:
Michelle Yau, Esq. email@example.com
Julia Horwitz, Esq. firstname.lastname@example.org
Dan Sutter, Esq. email@example.com
Maria Dewees, Paralegal firstname.lastname@example.org
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005
Telephone: 888-240-0775 (Toll Free) or 202-408-4600