• ERISA 401(k) Plan Proprietary Fund Claims Dismissed in Part
  • April 2, 2010
  • Law Firm: Sutherland Asbill & Brennan LLP - Washington Office
  • On March 16, 2010, the United States District Court for the Southern District of New York granted, in part, a motion to dismiss a putative class action alleging that a 401(k) plan sponsor and related fiduciaries engaged in prohibited transactions and violated fiduciary duties by having the ERISA-governed plan invest in affiliated mutual funds and by selecting an affiliated service provider to provide management services for the plan. The plaintiffs also alleged that the sponsor was a knowing participant in the alleged fiduciary breaches. The court dismissed the majority of the claims, but allowed plaintiffs’ claim for breach of fiduciary duty against the administrative and investment committees (the “committee defendants”) to proceed on the basis of allegations that the affiliated funds charged higher fees than comparable nonaffiliated funds. Leber v. Citigroup, Inc., No 1:07-cv-09329 (SHS) (S.D.N.Y.).