Wells Fargo Faces ERISA Lawsuit Over 401(k) Plan Asset Use
From the desk of Jim Eccleston at Eccleston Law
A new proposed class action has been filed in the US District Court in the Northern District of California, alleging that Wells Fargo and its associated committees violated the Employee Retirement Income Security Act (ERISA).
InvestmentNews reports that the complaint centers on the misuse of employer contributions forfeited by employees who left before being fully vested. The lawsuit claims Wells Fargo used over $2 million of such forfeited assets in 2022 to offset its future contributions to its $45.8 billion 401(k) plan, instead of using the funds to reduce expenses for plan participants.
This lawsuit is part of a trend, with similar cases filed against other employers like HP, Honeywell, Clorox, Mattel, Intuit, and Thermo Fisher Scientific. In a related case against Qualcomm, the lawsuit survived a motion to dismiss, marking a significant step in this line of litigation.
According to InvestmentNews, this type of litigation is relatively novel. The outcome of these cases remains uncertain, and while the Qualcomm case has progressed past a motion to dismiss, this does not necessarily predict success for other lawsuits.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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