Deutsche Bank settles 401(k) self-dealing lawsuit for $21.9 million

Deutsche Bank settles 401(k) self-dealing lawsuit for $21.9 million
Settlement is among the largest for financial services firms ensnared in similar litigation.
AUG 15, 2018
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). Some firms, such as Capital Group, Wells Fargo & Co. and Putnam Investments, have won their respective lawsuits. (More: Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry) 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. (More: 10 big settlements in 401(k) excessive-fee lawsuits) 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.

Latest News

New RIA aggregator United Wealth Partners gives majority ownership to advisors
New RIA aggregator United Wealth Partners gives majority ownership to advisors

RIA industry veterans Jay Hummel and John Phoenix have launched a firm which offers 60% equity to advisors with plans to grow to over $5 billion in AUM, before selling to an institutional investor within five years.

Wealth team launches KRM Investment Counsel
Wealth team launches KRM Investment Counsel

A high-net-worth advisory group leaves Wintrust to embrace independence.

Modern Wealth marks two-year milestone with 16th acquisition
Modern Wealth marks two-year milestone with 16th acquisition

Independent firm joins expanding national advisory network.

Shift toward fee-based models accelerates among independent advisors
Shift toward fee-based models accelerates among independent advisors

New research reveals shifting strategies in financial guidance.

EP Wealth Advisors acquires NBS Financial Services
EP Wealth Advisors acquires NBS Financial Services

Westlake Village office strengthened by acquisition.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.