NEW YORK, Oct. 2, 2008 (GLOBE NEWSWIRE) — A federal court has granted “class action” status to the Fifth Third 401(k) lawsuit that is pending in Cincinnati, Ohio. The lawsuit, brought on behalf of all participants and beneficiaries in the Fifth Third Master Profit Sharing Plan (the “Plan”), alleges that Fifth Third Bancorp (Nasdaq:FITB) (“Fifth Third”), George Schaefer and certain other top executives at the company mismanaged the Plan and breached their fiduciary duties under the Employee Retirement Income Security Act (“ERISA”).
ERISA is a federal statute that requires companies to act with loyalty and prudence when managing a 401(k) plan. The plaintiffs claim that Fifth Third and the other defendants violated ERISA by offering Fifth Third stock in the Plan at a time when it was an inappropriate investment and by failing to make appropriate disclosures to employees that would allow them to make an informed decision about investing in Fifth Third stock.
“This decision confirms the appropriateness of the class action mechanism in this case,” states lead attorney David R. Scott of Scott+Scott, LLP. “Only a class action can equalize the playing field between big-business defendants and the class.”
In a separate opinion, the court also upheld the plaintiffs’ claims that the defendants breached their fiduciary duties by charging the Plan unreasonably excessive investment management fees. Among other things, the plaintiffs allege that Fifth Third engaged in a practice known as “triple-dipping” on the Plan’s fees. “Triple-dipping” occurs when a company charges a 401(k) Plan three levels of fees, one at the plan level, one at the mutual fund level and one at the underlying mutual fund level. “Triple-dipping” increases the company’s own revenues and profits, at the expense of the employees and retirees in the 401(k) Plan. Plaintiffs allege that this practice is strictly prohibited under ERISA and constitutes a separate fiduciary duty breach.
National law firm Scott+Scott, LLP, has significant experience in prosecuting major ERISA, securities and antitrust cases throughout the United States. Scott+Scott is class counsel in the Fifth Third 401(k) lawsuit. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (email@example.com, (800) 404-7770, (860) 537-5537 or visit the Scott+Scott website, https://scott-scott.com) for more information.