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M&T Bank to Pay Nearly $21M to Settle Self-Dealing Suit

Defendants in a lawsuit alleging self-dealing by fiduciaries of the M&T Bank 401(k) plan have reached a settlement agreement.

According to the complaint, in 2010, eight of the plan’s 23 designated investment alternatives were M&T Bank proprietary mutual funds that cost significantly more than similar funds and performed worse. Rather than remove these overpriced and underperforming funds, the defendants expanded their proprietary funds offerings in 2011, after M&T purchased Wilmington Trust and added six of Wilmington’s expensive, poor-performing mutual fund offerings.

The suit also alleges the plan failed to use its bargaining power as a large institutional investor to obtain the lowest-cost class of shares available, and in several instances, failed to prudently monitor the plan to determine whether it had invested in the cheapest possible share class. The plaintiffs also claim the defendants were aware of the benefits of alternative investment vehicles such as collective trusts but failed to offer them to plan participants.

Read the source article at PLANSPONSOR

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