Stradley Ronon announced the formation of a new fiduciary governance group, which the firm is billing as a “multi-disciplinary practice,” to be led by co-chairs Lawrence Stadulis and George Michael Gerstein.
According to the firm, the fiduciary governance group includes 15 members. It will support financial institutions that “may be subject to multiple and conflicting sets of fiduciary or best interest obligations arising under federal and state law as a result of the nature of the different yet interrelated services they provide to their customers.”
“The fiduciary governance group is designed to counsel investment committees and intermediaries, such as investment advisers, banks, broker/dealers, retirement plan/IRA service providers, insurance providers and mutual fund directors, by identifying and making sense of this regulatory patchwork and helping clients understand the interplay of these federal and state rules,” the firm states.
Beyond helping advisers and financial intuitions prevent and respond to the wide sweep of Employee Retirement Income Security Act fiduciary breach claims filed by participants today—from excessive fee suits and self-dealing challenges to stock drop litigation and debates over the use of various capital preservation vehicles—the new governance group will track developments and emerging trends in the investing landscape, such as broader use of the environmental, social and governance (ESG) investing theme.
The group also pledges to “actively track the burgeoning state legislative efforts to impose fiduciary or comparable investment advice standards of care.” Such efforts are well under way in Nevada and New York, just to name two of many venues.
Industry watchers will not be surprised by this move from Stradley Ronon. As laid out in a very expansive class action litigation analysis published recently by another law firm specializing in ERISA, Seyfarth Shaw, plaintiffs found some significant success in 2017 when it came to winning class certification. Looking across all 12 U.S. federal appellate court circuits, in total 17 groups of plaintiffs earned class action certification in an ERISA challenge during 2017, whereas just five groups of plaintiffs formally saw their appeals for class certification denied. Obviously, class certification is still an early procedural step in any litigation, but the overwhelming success of ERISA plaintiffs’ attorneys in earning class certification across a wide variety of cases is an important trend and may speak to the validity of at least some of their broad claims, attorneys warn.