Attorneys of Humphrey, Farrington & McClain and three other local law firms are helping current and former employees of DST Systems Inc. recover losses from their 401(k) Profit Sharing Plan.
On behalf of their clients, these law firms have filed a lawsuit against DST Systems, its new parent company SS&C Technologies, the investment advisor Ruane, Cunniff & Goldfarb and several other defendants in the U.S. District Court for the Southern District of New York. The case is being tried in that venue because Ruane, Cunniff & Goldfarb is headquartered in New York City.
A vast majority of employees signed arbitration agreements as part of their employment with DST. It is becoming more and more common for employers to require their employees to sign arbitration agreements as a condition of employment. In these agreements, employees forfeit their ability to enforce their legal rights in court. Instead they grant a private arbitrator the authority to make all decisions in any claim that may arise.
Humphrey, Farrington & McClain, together with the three other local law firms, currently represents over 200 individuals who are pursuing claims via arbitration. Current and former employees who invested in the DST Profit Sharing Plan are eligible to join this litigation which claims that DST Systems allowed Ruane, Cunniff & Goldfarb to put too much of its employee retirement assets in one company’s stock.
By the end of 2014, an excessively high percentage of DST retirement accounts was comprised of shares of Valeant Pharmaceuticals International, Inc, a risky pharmaceutical stock. Retirement accounts must be well-diversified in order to offset the misfortune of a single stock and protect employees from losing money they will need in retirement. But those managing DST’s accounts concentrated too much of the accounts’ assets in Valeant.
Shares of Valeant plummeted from $258 per share on July 31, 2015 to $15 per share on January 10, 2016. Altogether, DST employees saw $395 million disappear from their retirement accounts.
The federal lawsuit and the arbitration claims state that the defendants caused these losses when they breached their fiduciary duties by not diversifying the investments: “No prudent fiduciary under like circumstances would have or could have made the same decision to invest so heavily in a single stock.” Defendants are responsible for the employees’ losses under the Employee Retirement Plan Security Act of 1974.
Kenneth B. McClain, senior partner at Humphrey, Farrington & McClain, said defendants must compensate DST employees for their losses. “Our clients worked hard to build their nest eggs,” McClain said, “they depended on that money for when they retire.”
Added associate Jonathan M. Soper: “These employees should not be punished because of defendants’ reckless financial management.”
The other plaintiff’s law firms that are participating in this suit are Kapke & Willerth, of Lee’s Summit; The Klamann Law Firm, of Kansas City; and White, Graham, Buckley & Carr, of Independence.
If you are a current or former DST employee whose investment in the DST Profit Sharing Plan has sustained losses, please call Humphrey, Farrington & McClain at 816-836-5050 or one of the three other law firms.
REMEMBER THE CHOICE OF AN ATTORNEY IS AN IMPORTANT ONE AND SHOULD NOT BE BASED SOLELY ON ADVERTISEMENTS.