They couldn’t fly from this one. Boeing is the latest company to settle a 401(k)-related class-action lawsuit, which was brought was by 190,000 current and former employees.
The aircraft mega-giant was targeted by Jerome Schlichter of St. Louis-based law firm Schlichter Bogard & Denton, LLP. Schlichter who recently made headlines as lead attorney for plaintiffs in Tibble v. Edison. He also represented the Lockheed plaintiffs and negotiated a $27.5 million deal with Ameriprise Financial Inc. earlier this year. The Wall Street Journal reports that, all told, settlements in eight of his 401(k) fiduciary-related lawsuits have brought in $214 million, with about a third of that going to Schlichter’s firm.
As the Journal notes, the settlement came last week, the same day a trial was scheduled to begin in the nine-year-old case. Terms weren’t disclosed. The two sides are expected to update the court on details of the talks next month and set a timeline for seeking final approval, according to a court order.
As with Tibble, the class-action suit centered on Boeing’s alleged failure to exercise its fiduciary duties to employees by allowing excessive 401(k) fees, choosing higher-cost retail mutual funds over cheaper institutional shares, and improperly engaging revenue sharing with third-party investment vendors.
Boeing has consistently denied the claims.
Schlichter said he was prepared to go to trial and was pleased to reach a tentative settlement. He said his firm continues to be committed “to improving the 401k savings plans that millions of Americans rely on for a secure retirement.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
