Wells Fargo & Co. has been hit with a proposed class action accusing the financial services company of mismanaging its $40 billion 401(k) plan by steering more than $5 billion of its workers' retirement savings into proprietary funds that have cost them $100 million in losses.
Yvonne Becker, a former Wells Fargo employee, lodged her Employee Retirement Income Security Act suit against the company, its board of directors, two committees, Galliard Capital Management and others in California federal court Friday.
Becker alleges in her complaint that the defendants — which she contended were fiduciaries to the Wells Fargo & Co. 401(k) Plan — ran afoul of their duties under the federal benefits law. Galliard is a subsidiary of Wells Fargo that acted as an investment manager for the plan, according to the pleadings.
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Daniel R. Sutter, an attorney for Becker, told Law360 on Monday that it was "especially important that Ms. Becker and other participants’ retirement savings are restored and protected from Wells Fargo's conflicts of interest during this time of historic economic uncertainty."
"Disregarding basic fiduciary norms, Wells Fargo selected proprietary investments for its employees' retirement savings that lacked any performance history and have significantly underperformed their benchmarks since their inception," Sutter said.
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