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Former Wells Fargo & Co. executives John Stumpf and Howard Atkins won’t have to defend a proposed class action alleging the bank stuffed its $35 billion 401(k) plan with expensive in-house target-date funds ( Meiners v. Wells Fargo & Co. , D. Minn., No. 0:16-cv-03981, 3/14/17 ).
A federal judge in Minnesota granted March 14 the unopposed motion to dismiss Stumpf and Atkins from the lawsuit. Stumpf, who stepped down as the bank’s chief executive officer in 2016, and Atkins, who was the its chief financial officer until he left in 2011, both ceased being members of the bank’s benefits committee long before the beginning of the class period.
The lawsuit, filed in November, also targeted 10 other bank executives for allegedly funneling billions of dollars of plan assets into Wells Fargo’s own proprietary funds. Since at least 2010, the bank intentionally selected target-date funds through a default feature and by encouraging participants to purchase funds through an “easy” and “quick” enrollment feature, the lawsuit alleges.
In October 2016, Stumpf made headlines when he stepped down and relinquished $41 million in unvested stock in response to a scandal over alleged fake accounts, according to data in the Bloomberg Terminal.
After the scandal came to light, participants in the bank’s 401(k) plan filed at least three lawsuits against Wells Fargo and its top executives alleging millions of dollars in losses in their retirement savings. They claimed the bank breached its fiduciary duties under the Employee Retirement Income Security Act by keeping Wells Fargo stock in the plan when the stock was artificially inflated.
Judge David S. Doty of the U.S. District Court for the District of Minnesota issued the opinion.
Cohen Milstein Sellers & Toll PLLC and Elias Gutzler Spicer LLC represent the proposed class. Dorsey & Whitney LLP represents Wells Fargo and the executives.
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