Latest 401(k) lawsuit filed in an avalanche of COVID-19 litigation

Latest 401(k) lawsuit filed in an avalanche of COVID-19 litigation
The law firm Capozzi Adler has brought numerous cases this year on behalf of plan participants
SEP 02, 2020

B. Braun Medical is among the latest companies sued so far this year in an unusual wave of 401(k) litigation.

That company, which was sued Aug. 26 in U.S. District Court in the Eastern District of Pennsylvania, is among more than 60 others facing new claims this year, according to an analysis by Bloomberg Law.

Leading in those new filings is law firm Capozzi Adler, which has filed at least 26 cases on behalf of clients, according to the Bloomberg report, including those in the case against B. Braun Medical.

At least some of the spike in new cases could be due to the COVID-19 crisis. According to an interview with law firm Shepherd, Finkelman, Miller & Shah in the Bloomberg report, inquiries about potential lawsuits have increased quickly, as “participants and retirees are at home and frankly are having more time to focus upon their retirement savings and be concerned about their retirement savings,” a lawyer at that firm said.

There were only about 20 401(k) lawsuits filed in all of 2019, according to Bloomberg’s analysis.

In the recent B. Braun Medical class-action lawsuit, four plan participants allege that the company breached its fiduciary duty by including unnecessarily expensive and underperforming investment options on the plan menu. Participants overpaid and lost out on potentially higher net returns to the tune of “millions of dollars,” according to the complaint.

That included not considering lower-cost share classes for certain investments, the complaint read. The plan switched from mutual funds to a lower-cost collective investment trust version of T. Rowe Price’s target-date series in 2019, although “this was too little, too late, as the damages suffered by plan participants to that point had already been baked in.”

The plan included nearly 6,400 participants as of 2018, representing more than $571 million in assets, according data from the Department of Labor.

B. Braun Medical declined to comment, citing a policy of not discussing pending litigation.

Law firm Capozzi Adler declined to comment beyond the information in court filings.

Latest News

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

Raymond James hauls Ameriprise advisors managing $1.1B in New York
Raymond James hauls Ameriprise advisors managing $1.1B in New York

Elsewhere, Sanctuary Wealth recently attracted a $225 million team from Edward Jones in Colorado.

Cetera debuts new alts allocation portfolios for accredited investors
Cetera debuts new alts allocation portfolios for accredited investors

The giant hybrid RIA is elevating its appeal to advisors with a curated suite of alternative investment models, offering exposure to private equity, private credit, and real estate.

Steward Partners expands in California with $1.1 billion RIA acquisition
Steward Partners expands in California with $1.1 billion RIA acquisition

The $40 billion RIA firm's latest West Coast deal brings a veteran with over 25 years of experience to its legacy division for succession-focused advisors.

Invictus managers withhold $10M, trigger ERISA asset showdown
Invictus managers withhold $10M, trigger ERISA asset showdown

Invictus fund managers allegedly kept $10 million in plan assets after removal, setting off a legal fight that raises red flags for wealth firms.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.