Morgan Stanley and Edward Jones Sued Over 401(k) Plan Mismanagement and Fees

Both Morgan Stanley and Edward Jones are in hot water because of mismanagement and overcharging of fees regarding the companies’ 401(k) plans. Morgan Stanley was accused of mismanaging the firm’s 401(k) retirement plan and costing 60,000 employees hundreds of millions of dollars by picking inappropriate and high-priced investments. This was done in order for the firm to profit from those sales. A lawsuit was filed against the firm last month and included a class action status for all who were enrolled in the $8 million plan from March 2010 until February 2016. The lawsuit complaint argued that Morgan Stanley did not act in the best interest of its customers by placing them in 401(k) plans that had high fees.

Edward Jones is also facing a lawsuit from an employee of the bank who alleges that the company’s 401(k) plan has caused employees to pay high fees for investment management and record-keeping services that supposedly cost them millions in retirement savings. Allegedly, from August 19, 2010 until the present, customers potentially lost $8 million because of the unreasonable fees paid. It is also alleged that the plan offered high-cost mutual fund share classes when lower-cost alternatives were available for the same funds. The participants in the 401(k) would have saved tens of millions more dollars if assets were invested in collective investment trust funds and separately managed accounts. Edward Jones allegedly did not offer its customers the options of purchasing lower-cost index funds and stable value funds. The funds they offered underperformed and more than $100 million was lost as a result.

FOX Business
The Wall Street Journal
FOX News Channel
USA Today
abc NEWS
Contact Information