Wells Fargo is on the hook for about $145 million over allegations that its 401(k) plan overpaid for the company’s preferred stock.

The Department of Labor alleges that, from 2013 through 2018, Wells Fargo and a plan trustee, GreatBanc Trust Company, had the 401(k) plan pay between $1,033 and $1,090 per share for Wells Fargo preferred stock, which converted to a set $1,000 in Wells Fargo common stock when allocated.

In addition, the investigation, carried out by the DOL’s Employee Benefits Security Administration, found that the plan borrowed money from Wells Fargo to buy the preferred stock, according to the DOL.

The EBSA also found that Wells Fargo used the dividends paid on the preferred shares to repay the stock purchase loans, thereby defraying its obligation to make contributions to the plan and causing plan participants to overpay for each share of stock, the DOL says.

The agency recovered more than $131.8 million for the retirement plan’s participants and imposed a penalty of nearly $13.2 million on Wells Fargo. The firm did not admit or deny the allegations, according to the DOL.

As part of the settlement, GreatBanc “will not act as a fiduciary to a public company in connection with any future leveraged transaction involving an employee stock ownership plan, unless the plan acquires only publicly traded stock and pays no more than the fair market value,” the agency said.

Janus Henderson, meanwhile, is facing a lawsuit alleging that the firm stuffed its 401(k) plan options with underperforming proprietary funds charging excessive fees, writes FA-IQ sister publication Ignites.

The $1.8 billion Janus Henderson Overseas Fund, for example, returned 0.42% over 10 years in 2020, compared to 4.92% returned by its benchmark, while similar funds, such as Hartford International Opportunities and MFS International Diversification returned 6.68% and 7.7%, respectively, the publication writes, citing the complaint.

In some cases, Janus’ proprietary funds’ fees were more than double the fees charged by the average 401(k) fund in their categories, the complaint says, according to Ignites.

The plaintiff, Sandra Schissler — who joined Janus Capital Group as a contracts manager in 2012, according to LinkedIn — seeks to form a class with 1,900 other participants, the publication writes.

Schissler’s lawyer at Nichols Kaster did not respond to Ignites’ request for comment, and a Janus Henderson spokesperson declined comment to the publication.