Closed Case
Employee Benefits
Settled in 2001 for $26 million and Injunctive Relief

In two related cases filed in 1999 in the Eastern District of Virginia, the plaintiffs alleged that First Union violated fiduciary duties in its management of the 401(k) plan of Signet Bank and of its own 401(k) plan. Financial services companies closely watched these cases because they challenged practices very similar to those used by other banks, insurance companies, and investment companies in managing the 401(k) plans of their employees. The principal claims were that First Union considered only its own funds in selecting investment options for its employees' 401(k) plan and that First Union charged its plan excessive amounts for record keeping services. 

The litigation was hard-fought. Each side took many depositions and filed numerous summary judgment motions. However, in 2001, prior to receiving rulings on most of the motions, the parties agreed to a settlement in the amount of $26 million and to appointment of an independent advisor to the fiduciaries of the First Union 401(k) plan.

Co-Counsel: Hirschler, Fleisher, Weinberg, Cox & Allen

Reported Decision:

• 84 F. Supp. 2d 720 (E.D. Va. 2000)