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Merrill Lynch Faces $25M Settlement Over 401(k) Fees

June 13, 2017

Merrill Lynch is facing a $25 million settlement over excessive 401(k) fees for which the firm has already paid $79 million, Bloomberg writes.

The case involves retirement accounts that LAAD Retirement Plan and the LAAD Corp. S.A. Money Purchase Retirement Plan held with Merrill Lynch, Pierce, Fenner & Smith Inc., according to the news service.

Trustees on the retirement plans allege Merrill Lynch breached its ERISA fiduciary duties on smaller retirement plans when it charged excessive fees on mutual fund purchases that were supposed to occur at a discount, Bloomberg writes. Several months prior, a judge denied Merrill Lynch’s motion to dismiss the suit, according to the news service.

The settlement follows a 2014 letter of acceptance and a $79 million remediation payment Merrill Lynch agreed to with Finra over failing to pass through mutual fund waivers to small business retirement accounts, Bloomberg writes.


But the LAAD trustees claim that payment wasn’t sufficient to cover losses, according to the news service. The new settlement would make about 39,000 class action suit members whole, says Frank Rodríguez of Rodriguez Tramont & Nunez P.A., who served as class counsel, tells Bloomberg.

If approved by the federal court in Florida, the new settlement will require Merrill Lynch to pay corrective remediation of at least $8.8 million and a disgorgement of $16.2 million, with $8.75 million going to the class action lawyers involved in the suit, according to the news service. Merrill Lynch declined comment to Bloomberg on the matter.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.