The parties in a lawsuit against Eaton Vance Corporation and its 401(k) plan investment committee have reached a settlement.
The settlement agreement calls for a payment of $3.45 million, with $1.5 million to go to the plaintiff’s attorneys. In March, the plaintiff asked for a stay of the case while a settlement was being negotiated.
The lawsuit alleged that instead of leveraging its investment expertise to select prudent investment options on the open market, Eaton Vance filled the plan with funds that Eaton Vance managed. Of the 42 non-money market investments strategies on the plan, 35 were managed by one of the Eaton Vance defendants. Moreover, Eaton Vance proprietary funds were the exclusive actively managed investment strategies available on the plan. The lawsuit claimed that 80% of the $434,848,484 in assets under management in the plan were invested in Eaton Vance funds.
Yet, nothing in the settlement agreement calls for Eaton Vance to make any changes to its investment menu for the plan.According to the settlement agreement, it is “entered into solely for the purpose of avoiding possible future expenses, burdens, or distractions of litigation, and defendants and released parties deny any and all wrongdoing.”