Looks like famed retirement plan litigator Jerry Schlichter has done it again.
A $12 million settlement has been approved in a long-running excessive 401k fee class action lawsuit between Oracle Corp. and a group of its 401k plan participants represented by Schlichter Bogard & Denton.
Just before the case was set to go to trial back on Dec. 3, 2019, attorneys for both sides notified the court of a preliminary settlement agreement, according to court records. That led a Colorado federal judge to vacate the trial on what would have been its first day just 5 minutes after it started.
The case was settled on behalf of more than 70,000 current participants in Oracle’s retirement plan (which had about $14.3 billion in assets at the end of 2018) for the aforementioned $12 million, of which a maximum payout of almost $4.5 million will go to Schlichter Bogard & Denton.
According to court documents, the settlement helps both parties avoid substantial risks from the process of reaching a court decision.
Originally filed in January 2016, the lawsuit alleged that Oracle breached its fiduciary duty to 401k plan participants by allowing its retirement plan’s recordkeeper, Fidelity, to charge excessive fees. Further, it alleged that Oracle’s retirement plan contained imprudent investment options that “consistently underperformed, charged excessive fees, and paid revenue sharing to Fidelity far beyond a reasonable rate for the services provided,” according to a statement on the Schlichter Bogard & Denton website.
The options in questions were the Artisan Small Cap Value Fund, TCM Small-Mid Cap Growth Fund and PIMCO Inflation Response Multi-Asset Fund.
The settlement also requires Oracle to instruct Fidelity not to cross-sell any products or services to its plan participants for three years. Fidelity was not named as a defendant.
St. Louis-based Schlichter Bogard & Denton previously negotiated multimillion-dollar settlements in similar suits with Lockheed Martin, Boeing, ABB and the Massachusetts Institute of Technology. According to the St. Louis Business Journal, it has reached settlements or won awards totaling more than $1.5 billion in such litigation, including a $62 million settlement with Lockheed Martin, a $55 million settlement with ABB and a $57 million settlement with Boeing, according to the law firm.
Schlichter Bogard & Denton is currently representing four participants in Shell Oil Co.’s $10.5 billion 401k plan in a lawsuit challenging the plan’s fees and handling of confidential data.
Schlichter has also been a part of a number of cases recently filed against preeminent universities, including Duke, NYU, Northwestern and the Massachusetts Institute of Technology.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
