Plaintiffs in this case, participants in the DST Systems profit sharing and 401(k) Plans, claim that the plan advisory committee, Board of Directors, and compensation committee and the advisory firm Ruane Cuniff & Goldfarb, Inc. did not implement a prudent investment strategy for a significant portion of plan assets, causing the Plan to suffer over $100 million in losses. Ruane Cuniff & Goldfarb served as an adviser and fiduciary to the DST Systems plan until August 2016, at which time its services were terminated. The Sequoia Fund, Ruane’s “flagship” fund was $25 billion in assets until Ruane engaged in a “misguided and reckless” investment strategy focused on investment in Valeant Pharmaceuticals International, Inc.
Plaintiffs also allege unreasonable plan expenses for administration and expensive underperforming funds in lieu of more prudent options, as a result of severe conflicts of interest among the fiduciaries of the Plan. Plaintiffs are requesting relief inclusive of compensatory damages, attorney fees and recoverable litigation fees, declaration of ERISA violations and law infractions, permanent injunctions against defendants prohibiting imprudent practices, requiring them to act in the best interest of participants, and disgorgement and/or restitution of all payments/compensation improperly received by defendants.
www.planadviser.com; September 19, 2017.