Overview
On July 24, 2023, Cohen Milstein filed Andrew-Berry, et al. v. Weiss, Case No. Case 3:23-cv-00978 in the United States District Court of the District of Connecticut. This putative ERISA class action has been filed against GWA LLC, a hedge fund manager, and George A. Weiss, on behalf of Plaintiffs, who are participants in the GWA, LLC 401(k) Profit Sharing Plan (the “Plan”), and who allege that GWA, LLC and George A. Weiss breached their fiduciary duties and misused employee retirement plan assets to further their own pecuniary interest, in violation of Employee Retirement Income Security Act of 1974 (ERISA).
Summary of Allegations
Specifically, Plaintiffs allege that 100% of the Plan’s investments (all of which are 401(k) assets) were and continue to be invested in “The Weiss Funds,” which includes the company’s flagship hedge fund named the “Weiss Multi-Strategy Partners (Cayman) Ltd.” and the company’s mutual fund named the “Weiss Alternative Multi-Strategy Fund” (the “Weiss Mutual Fund”), which generally “replicates” the hedge fund’s strategy. Both Weiss Funds are considered “alternative investments” and are designed as alternatives to fixed income investments. Dedicating Defendants’ Plan portfolio to the two Weiss Funds is highly unprecedented. Indeed, retirement industry studies have observed that only 0.1% of defined contribution plan (i.e., 401(k) plan) assets are invested in “alternative investments.” Prevailing practice for retirement portfolio allocation recognizes that the portfolio should reflect a mix of asset classes to produce the long-term capital appreciation necessary for participants to save adequately for retirement.
Plaintiffs further claim that the Weiss Mutual Fund (in particular) lacked the performance history, market acceptance, and cost structure to be a substantial investment for the Plan. Specifically, near the time the Plan first invested in the Weiss Mutual Fund, the fund had only one full calendar year of performance history and just $7.75 million of assets under management (AUM). It also had an expense ratio that was 650% more than average.
Further the Plan’s investment expenses—mostly paid to Defendants—swelled substantially above average. As a result, Plan participants’ accounts are worth at least 30% less than they would have been had the Plan been managed prudently, loyally, and in strict conformance with ERISA’s prohibited transaction rules.
Class Participants
Plaintiffs include current and former employees of GWA, LLA who are or were participants in the GWA, LLC 401(k) Profit Sharing Plan between July 24, 2017 and the present.
Status of the Litigation
- On July 24, 2023, Cohen Milstein filed Andrew-Berry, et al. v. Weiss, Case No. Case 3:23-cv-00978, a putative ERISA class action with the United States District Court of the District of Connecticut.