Appeals court upholds dismissal of Wells Fargo 401(k) lawsuit

Appeals court upholds dismissal of Wells Fargo 401(k) lawsuit
Participant argued that the plan could have offered a better-performing, nonproprietary TDF.
AUG 06, 2018
A federal appeals court in St. Louis upheld a U.S. District Court judge's dismissal of an ERISA breach claim against Wells Fargo & Co. by a participant in the company's 401(k) plan, who alleged fiduciaries could have offered a better-performing nonproprietary investment choice. The complaint "failed to plausibly allege a breach of fiduciary duty," according to the unanimous ruling by a three-judge panel. "The complaint failed to state a claim upon which relief can be granted." In the case of Meiners et al. vs. Wells Fargo & Co et al., a U.S. District Court Judge in Minneapolis had dismissed the complaint in May 2017. The participant, John Meiners, had argued that including the Wells Fargo Dow Jones Target Date Funds series was an ERISA violation because a similar target-date series from Vanguard Group had better returns. "A comparison of the returns of two different funds is insufficient" to prove a fiduciary breach, U.S. District Court Judge David S. Doty wrote. The Wells Fargo series, he noted, had a higher allocation of bonds than the Vanguard series. "The District Court correctly determined that Meiners' omission of any meaningful benchmark in his complaint mean that he failed to allege any facts showing the Wells Fargo [target-date funds] were an imprudent choice," the appeals court wrote. "As a result, Meiners' complaint failed to state a claim for relief under ERISA and we affirm its dismissal." The Wells Fargo & Co. 401(k) Plan had $45.9 billion in assets as of Dec. 31, 2017, according to its latest 11-K filing. Robert Steyer is a reporter for InvestmentNews' sister publication Pensions & Investments.

Latest News

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel 'financially comfortable' or 'wealthy' in 2025?
What does it take to feel 'financially comfortable' or 'wealthy' in 2025?

New report shines a light on how Americans view wealth today.

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.