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DST Systems Settlement

This lawsuit, involving the DST Systems Inc. Profit Sharing and 401(k) Plan offering of the Sequoia Fund has reached preliminary settlement. The Sequoia Fund was offered in the Plan and as a component of a non-participant directed account within the Plan, and was heavily invested in Valeant Pharmaceuticals International Inc., the stock at one time comprising 35% of fund assets. Plaintiffs in the case – Plan participants – alleged a fiduciary breach in the failure to monitor and diversify plan investments, leading to over $100 million in participant losses. DST Systems Inc., investment advisor Ruane, Cunniff & Goldfarb & Co., including President and CEO of the firm, Robert D. Goldfarb, will be paying plaintiffs in the amounts of $27 million, $21.5 million and $30.5 million respectively. Of note, similar allegations have been filed against other firms offering the Sequoia Fund in their retirement plans. Also, Valeant Pharmaceuticals, now Bausch Health, agreed to pay $45 million to the Securities and Exchange Commission (SEC) for improper revenue recognition and misleading disclosures within SEC filings and earnings presentations.

www.planadviser.com; January 12, 2021.
www.pionline.com; January 14, 2021.