Wells Fargo & Co. was sued in the Northern District of California by a former employee who says the company filled its 401(k) plan with expensive, underperforming investments that paid fees to the company.
Yvonne Becker’s proposed class action, filed March 13, challenges the Wells Fargo target-date collective investment trusts in the company’s 401(k) plan, which are the default options for participants who don’t select their own investments. Wells Fargo transferred about $5 billion worth of plan assets to these target-date trusts in 2016, even though the trusts were newly established and had “no prior performance history or track record which could demonstrate that they were appropriate,” Becker said.
Causes of Action: Breach of the fiduciary duties of loyalty and prudence in violation of the Employee Retirement Income Security Act; prohibited transactions; failure to monitor fiduciaries.
Relief: Declaration of fiduciary breach; disgorgement of profits; restoration of losses; equitable lien over ill-gotten profits; removal of breaching fiduciaries; injunction blocking further breaches; attorneys’ fees and costs.
Potential Class Size: As many as 344,287 participants in Wells Fargo’s 401(k) plan, along with their beneficiaries.
Response: A spokesman for Wells Fargo said the company is reviewing the allegations and has no further comment.
Attorneys: Cohen, Milstein, Sellers, & Toll PLLC and Feinberg, Jackson, Worthman & Wasow LLP represent the proposed class.
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