Jerry Schlichter has Shell Oil in his sights. The tort lawyer made famous for bringing suits against plan sponsors for breach of fiduciary duty is at it again, and it involves Fidelity Investments, his proverbial punching bag.
The charge is a breach of the company’s fiduciary duty to the plan’s participants through high fees and proprietary mutual funds in the investment menu. Four Shell employees have filed suit in the Southern District of Texas. An additional, more unusual charge is that Shell was also derelict in handling confidential participant data.
“Instead of using the Plan’s bargaining power to benefit participants and beneficiaries, Shell Defendants allowed unreasonable expenses to be charged to participants for administration of the Plan and managed account services, failed to even monitor numerous funds in the Plan at all, and retained poorly performing investments that similarly situated fiduciaries removed from their plans,” the complaint reads.
“Even worse,” it adds, “Shell Defendants allowed the Fidelity Defendants to use Plan participants’ highly confidential data, including social security numbers, financial assets, investment choices, and years of investment history to aggressively market lucrative non-Plan retail financial products and services, which enriched Fidelity Defendants at the expense of participants’ retirement security.”
Legal action
To remedy these breaches of duty, the plaintiffs, “individually and as representatives of a class bring this action on behalf of the Plan …to enforce Defendants’ personal liability …to make good to the Plan all losses resulting from each breach of fiduciary duty.”
Interestingly, Schlichter, with St. Louis-based Schlichter Bogard & Denton, cites Tibble v. Edison International as a precedence in the court filings, a case he successfully argued before the Supreme Court.
“The duty of prudence includes a duty to be cost-conscious and “to minimize costs,” because “[w]asting beneficiaries’ money is imprudent [,]” the filing’s Tibble portion reads.
Schlichter has also been a part of a number of cases recently filed against preeminent universities recently, including Duke University, New York University, Northwestern and Massachusetts Institute of Technology.