A recently filed class action lawsuit against Stifel Financial alleges that Stifel mismanaged funds in its retirement plan, which holds more than $2 billion in assets for over 10,000 plan participants. In their lawsuit, the plaintiffs claim that Stifel violated the Employee Retirement Income Security Act (ERISA) by failing to remove two underperforming funds from the plan. The lawsuit is pending in the U.S. District Court for the Eastern District of Missouri.
According to the plaintiffs, the plan’s investments of almost $160 million in the American Century Large Cap Growth Fund and over $73 million in the Artisan Mid-Cap Growth Fund resulted in losses of up to $134 million for plan participants over the last six years. The American Century fund has underperformed its benchmark and comparable large-cap growth funds by over 30 percentage points since March 2020. Since the fund was created in 2001, it has underperformed the benchmark by 256 percentage points.
Likewise, the Artisan fund underperformed its benchmark and comparable mid-cap growth funds by 42 percentage points. The average underperformance was 14.4 percentage points from March 1, 2020, through the present. Both funds underperformed by about 1.4% annually, a level that can cost plan participants hundreds of thousands of dollars over the course of their careers.
The same law firm that filed the suit against Stifel filed a similar suit against Bloomberg’s 401(k) in January. In that suit, the plaintiffs targeted Bloomberg’s failure to remove two funds for poor performance over a decade.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
