Rollins Inc. 401(k) participant sues Morningstar, Prudential over alleged RICO violations

Plaintiff says automated investment advice program is a 'predatory racketeering enterprise'
AUG 31, 2017

A participant in a 401(k) plan of Rollins Inc., Atlanta, sued Morningstar and units of Prudential Financial, alleging they violated a federal racketeering law in offering an investment service to plan members. Rollins plan officials and Rollins corporate executives were not named as defendants in the lawsuit, Green vs. Morningstar Inc. et al., filed this month in U.S. District Court in Chicago. The lawsuit seeks class-action status. Representatives of Morningstar and Prudential declined to comment. The complaint said Morningstar and Prudential violated the Racketeer Influenced and Corrupt Organization Act by engaging in a "conspiracy" to increase revenue and profits "from their self-interested administration" of GoalMaker, an "automated investment advice program" from Morningstar and Prudential. Alleging GoalMaker is a "predatory racketeering enterprise," the lawsuit argued that it "gets retirement plan investors to turn over the investment management of their accounts" to a unit of Prudential. "This application steers retirement investors like (the) plaintiff into high-cost investments that pay unwarranted fees to defendants," the complaint alleged. The Rollins Inc. 401(k) Savings Plan had assets of $559.3 million as of Dec. 31, according to the company's latest 11-K filing with the Securities and Exchange Commission. The suit was filed by the law firms Schneider Wallace Cottrell Konecky Wotkyns and Nix, Patterson & Roach. Pensions & Investments is a sister publication of Investment News.

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