So I haven’t ranted about politics in a while and this is stuff south of the border but this is great news for American workers.
Aunanimous Supreme Court ruling Monday in Hughes v. Northwestern University ensures that Americans will still be able to sue employers and Wall Street banks that bleed dry their retirement accounts — a landmark precedent in protecting the $7.3 trillion Americans hold in 401(k) accounts.
The 8-0 ruling, written by Sonia Sotomayor, found that 401(k) plan participants could continue to take legal action against employers for including high-fee, high-risk investments in their 401(k) lineup, even if they also included lower-fee, lower risk options.
The decision could be a blow against powerful private equity industry titans, who for years have been aiming to convince 401(k) plans to include their high-fee, high-risk offerings. Blackstone Group CEO Stephen Schwarzman has said accessing retirees’ 401(k) accounts was “one of our dreams.”
Later in the article…
James Watkins III, an attorney who has been involved in 401(k) litigation, said that the ruling will force accountability from Wall Street.
“I gave a presentation one time at an event, and I was eating lunch, and the guy behind me said ‘very impressive presentation,’” said Watkins. “He introduced himself and said he was the CEO of a company. One of the things I have told employers is that you really need to provide plan participants with a basic education class. He told me, ‘Our company will never voluntarily give investor education to employees because they would realize how bad the plan is and then they would call you and you would sue us.’ This decision today forces them to rethink that.”
Source: Jacobin
A huge win for workers and should tell everyone never to invest in actively managed high fee mutual funds, the “small” management fee will bleed your return totally away. As Jack Bogle once said, “you put up 100% of the capital, take 100% of the risk and get 30% of the return” and this should really be a wake up call. Actively managed funds are a scam and if your financial advisor says they’re great they’re right in a sense that they’re great for them and the fund managers, not you.
I think it’s safe to say that if Wall Street & big banks are for something then I’m against it.
