Not quite two months ago, a federal judge had granted a motion to dismiss an excessive fee suit, but left the door open for the plaintiff to amend their complaint – and now, those parties have come to terms.
The defendant in this case is Invesco – and the suit, filed in 2018 by participant-plaintiff Diego Cervantes in the U.S. District Court for the Northern District of Georgia (Diego Cervantes v. Invesco Holding Co. (US) Inc. et al., case number 1:18-cv-02551), alleged a number of issues that have been raised in similar lawsuits: that defendants failed to use their leverage as a large plan to reduce costs for the benefit of plan participants, and that they offered inferior performing proprietary retail shares (which benefited the sponsoring company) rather than better performing institutional class shares. Cervantes also had issues with how the plan’s self-directed brokerage account was structured (“to restrict participants’ choices” to ETFs affiliated with Invesco).
In early October Judge Amy Totenberg granted the Invesco defendants’ motion to dismiss – but granted the plaintiff an opportunity to amend his suit/complaint.
Now those same parties have filed notice of a settlement deal with the court (Cervantes v. Invesco Holding Co., N.D. Ga., No. 1:18-cv-02551, notice of settlement 11/22/19), noting that they “will work diligently on a written settlement agreement and prepare and submit a motion for preliminary approval of the anticipated class settlement under Rule 23(e) of the Federal Rules of Civil Procedure.”
The settlement would be another financial services company to agree to settle such claims, joining SEI ($6.8 million), MFS ($6.875 million), Eaton Vance ($3.45 million), Franklin Templeton ($4.3 million), BB&T ($24 million), Jackson National ($4.5 million), Deutsche Bank ($21.9 million), American Airlines Group Inc. ($22 million), Allianz SE ($12 million) and TIAA ($5 million).
The terms of the current settlement haven’t yet been made public, but the parties told the court that they expect to be in a position to make that submission to the court within 60 days, though – “in the event the parties are unable to reach a final agreement to settle this action, they will promptly notify the Court.”
Stay tuned.
