A participant in a Charles Schwab
Corp. 401(k) plan sued the plan and corporate executives, alleging they
violated their ERISA duties by offering Schwab funds that were “more expensive
than comparable alternatives available in the marketplace.”
The lawsuit, filed Jan. 19 in
U.S. District Court in San Francisco, contended that the executives breached
their fiduciary duties, saying they “imprudently and disloyally larded the plan
with unnecessary, expensive and poorly performing investment products and
services.”
The lawsuit, Severson vs. The
Charles Schwab Corp. et al., seeks class-action status.
“We intend to vigorously defend
against this case and believe it is totally without merit,” Mike Peterson, a
Schwab spokesman, wrote in an email. “We are committed to helping employees
save for retirement by providing a 401(k) plan with low-cost investment
products and independent personalized advice.”
Plaintiff Christopher Severson, a
participant in the SchwabPlan Retirement Savings and Investment Plan, asserted
in his complaint that offering Schwab products and services enabled Schwab to
reap “significant fees and profits at the expense of the plan and its
participants.”
The plan had $2.93 billion in
assets as Dec. 31, 2015, according to the company's latest Form 5500 filing.
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