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Abbott Laboratories 401(k) Plan Security Breach

A lawsuit filed on behalf of a former Abbott Laboratories 401(k) Plan participant alleges a fiduciary breach by Abbott Labs and the Plan’s recordkeeper, Alight Solutions, LLC. More specifically, the defendants are accused of a failure to enforce a security protocol for the plaintiff’s accounts as well as failure to communicate changes to the account in concert with known account preferences, thereby allowing $245,000 to be fraudulently distributed from the plaintiff’s 401(k) account. The suit claims that Alight Solutions is a fiduciary to the Plan, as Alight exercised control over Plan assets by “directing distributions from participants’ accounts, including the unauthorized distributions it allowed” from the participant’s account. Further, the lawsuit claims that Alight should have been aware of the possibility of such fraudulent activity, due to “similar prior incidents.” The suit alleges that the breach was initiated via the participant website. As a result of incorrect entries of the participant’s social security number and birthdate, an impersonator opted to receive a one-time passcode via email, allegedly to the plaintiff’s email address. The plaintiff claims that no such email was received, yet the intruder did somehow receive, and was able to successfully change the password and enter SunTrust bank account information for receipt of a distribution. Other infractions allegedly occurred, inclusive of communication of personal information by an Alight customer service representative to the impersonator and advice of a bank account change on the account via regular mail, rather than via email, in accordance with the participant’s preference. In between the impersonator’s communications with Alight, the plaintiff accessed the account and learned of the distribution. Upon contacting the authorities, an investigation confirmed the fraudulent activity. Subsequent efforts at recovery only included the reimbursement of the tax withheld and an amount recovered from the SunTrust’s recovery efforts. Over $136,000 remains outstanding.

www.planadviser.com; April 13, 2020.