Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Deutsche Bank Americas Holding Corp. and its workers reached a settlement just one day before they were scheduled to start trial over claims that the multinational bank allegedly profited from offering expensive, affiliated funds in its 401(k) plan.
The parties informed the court that they reached a “settlement in principle on July 8,” according to an order by Judge Lorna G. Schofield of the U.S. District Court for the Southern District of New York. The parties have until Aug. 14 to submit the settlement terms and request preliminary approval of class action settlement, Schofield said.
The deal came just days after Schofield trimmed the workers’ lawsuit, allowing them to advance claims of fiduciary breach based on the offering of in-house funds that carried excessive fees and performed poorly.
Deutsche is one of several companies in the banking and finance industry hit in the past couple of years with lawsuits by employees challenging decisions to add proprietary, expensive, and underperfoming mutual funds in their retirement plans.
For the most part courts have sided with the employees, with only Capital Group and Wells Fargo & Co. succeeding in getting such lawsuits dismissed. Judges have certified classes in cases against American Century Services LLC, Insperity Inc., BB&T Corp., and Franklin Templeton.
If the settlement is approved by the court, Deutsche would become the sixth financial company to settle similar claims, following American Airlines Group Inc. ($22 million), Allianz SE ($12 million), TIAA ($5 million), New York Life Insurance Co. ($3 million), and Principal Life Insurance Co. ($3 million).
Nichols Kaster PLLP represents the class. Goodwin Procter LLP represents Deutsche.
The case is Moreno v. Deutsche Bank Americas Holding Corp., S.D.N.Y., No. 1:15-cv-09936, order for parties to file motion for preliminary approval of class action settlement 7/9/18.
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