Merrill Lynch has agreed to a $25 million settlement in a 401(k) lawsuit alleging the firm breached its fiduciary duties when it failed to ensure a small-retirement-plan client received mutual-fund sales discounts to which it was entitled.
The plaintiffs — trustees for the LAAD Retirement Plans, which held accounts with Merrill Lynch — sought disgorgement or restitution from Merrill Lynch for any ill-gotten gains and excessive payments made due to the allegations of fiduciary breach, on plaintiffs' behalf and that of similarly situated plans.
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As part of the settlement agreement, filed June 8, Merrill Lynch didn't include an admission of wrongdoing. The settlement is now pending final approval by the court.
Merrill Lynch had earlier made remediation payments regarding the sales charge waivers to small-business retirement accounts, to the tune of $79 million. Plaintiffs believed this remediation to be insufficient, and filed the lawsuit,
Benjamin Fernandez v. Merrill Lynch, Pierce, Fenner & Smith Inc.
A spokesman for the firm declined comment on the settlement.
The lawsuit was originally filed July 2015 in the U.S. District Court for the Southern District of Florida.
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