Summary of the Lawsuit
The lawsuit alleges that General Electric Company (“GE”) and other fiduciaries violated the Employee Retirement Income Security Act of 1974 (“ERISA”) by failing to prudently and loyally manage the General Electric Retirement Savings Plan (“the Plan”) by selecting and maintaining funds offered by GE Asset Management, Inc. (“GEAM”) as the investment options for the Plan and also alleged certain fiduciaries and non-fiduciaries engaged in prohibited transactions.
Summary of the Claims
The Complaint challenges the GE Plan fiduciaries’ decision to offer the GEAM Funds – Funds managed by GEAM, a wholly owned subsidiary of GE – as the only actively managed funds in the Plan, which meant that a participant who wanted to invest in something other than index funds would be forced to invest in GEAM Funds. By selecting and keeping the GEAM Funds in the Plan, the Complaint alleges Defendants breached their fiduciary duties as the Funds had poor performance, high fees and the decision was designed to benefit of GEAM and at the expense of the Plan. As a result of the decision to invest the GEAM Funds, the Plan assets constituted the majority of the assets of the GEAM. Ultimately, the significant investment of the Plan assets in the underperforming GEAM Funds enhanced the sale value of GEAM and resulted in GE being able to sell GEAM to State Street for $485 million.
In addition to fiduciary breaches, the Complaint also alleges that GE and other fiduciaries engaged in prohibited transactions by self-dealing with Plan assets. The Complaint also alleges liability for certain fiduciaries as a result of the failure to monitor other fiduciaries of the Plan to ensure they were acting in accordance with ERISA fiduciary duties and Defendants’ knowledge of other breaches of fiduciary duty and other fiduciaries’ role in prohibited transactions.
Class Action Allegations
This lawsuit is brought on behalf of the following persons:
All participants in the GE Retirement Savings Plan (f/k/a General Electric Savings and Security Program) from October 30, 2011 to the date of Judgment who were invested in one or more of the GE Funds through the Plan.
Excluded from the Class are (a) Defendants, (b) any fiduciaries of the Plan, (c) the officers and directors of GE and any entity in which GE has or had a controlling interest during the Class Period, and (d) members of the immediate families and their legal representatives, heirs, successors or assigns of any such excluded party.
The GEAM Funds consist of the following investments: GE Institutional International Equity Fund, the GE Institutional Strategic Investment Fund, the GE RSP US Equity Fund, the GE RSP US Income Fund and the GE Institutional Small Cap Equity Fund.
Status of Litigation
The Complaint was initially filed on November 1, 2017. Plaintiffs filed a Consolidated Amended Class Action Complaint on January 12, 2018 and a Second Consolidated Amended Class Action Complaint on March 9, 2018. Defendants filed a Motion to Dismiss the Second Consolidated Amended Complaint on April 25, 2018. The Court issued an Order denying in part and taking under advisement in part Defendants' Motion to Dismiss the Second Consolidated Amended Complaint on August 17, 2018.
Whom to Contact for More Information
If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:
Jason Leviton, Esq. (email@example.com)
Block & Leviton LLP
260 Franklin Street, Suite 1860
Boston, MA 02110
Contact our attorneys for a no-cost case evaluation.