Attorney (and FRA/PlanTools blogger) Thomas Clark reports a major victory for plaintiffs in Spano v. Boeing Co., one of the original 401(k) excessive fee cases filed in 2006 by Jerome Schlichter. The court granted the amended motion for class action in the case, which will now be allowed to proceed.
The original allegations against Citistreet, the plan’s record keeper, included:
• Imprudent inclusion of four mutual funds when institutional funds were available
• Funds charged excessive fees and kickbacks to the record keeper
• Lack of diversification of one fund and additional revenue sharing for another
• High levels of low-yielding cash in the company stock fund, allowing State Street to receive multiple layers of fees
The amended claim was granted because the time period was limited and the groups were divided into sub-classes. Clark states that this represents a major victory for plaintiffs since the decision was not expected so soon. It still remains to be seen, however, whether the claims are viable enough to proceed to trial.
