Deutsche Bank has reached a $21.9 million settlement in a lawsuit alleging the investment bank enriched itself at the expense of its employees by loading its company 401(k) plan with proprietary funds.
Deutsche's settlement, which still needs court approval, is among the largest reached by financial services companies targeted in similar 401(k) litigation.
American Airlines settled a case involving American Beacon Advisors, an investment manager formerly affiliated with the firm, for $22 million last year. Other firms to settle include Allianz ($12 million), Citigroup Inc. ($6.9 million), TIAA ($5 million) and New York Life Insurance Co. ($3 million).
The Deutsche Bank lawsuit — Moreno et al v. Deutsche Bank Americas Holding Corp. et al — was originally filed in December 2015. Plaintiffs claimed Deutsche profited off its employees' retirement savings by including high-cost funds managed by the firm and its affiliates in its 401(k) plan.
The plan has roughly $3 billion in assets, according to BrightScope Inc. Approximately 34,700 individuals will receive relief as part of the settlement agreement, which was filed Tuesday in the U.S. District Court for the Southern District of New York.
The settlement also includes non-monetary relief, including the retention of an independent fiduciary, to which Deutsche will delegate decisions regarding proprietary investments and whether mutual funds should be replaced with separate accounts or collective trust funds.