Posted August 22nd, 2016.
Sanford Heisler partner Charles Field discussed his law firm’s lawsuit against that accuses Morgan Stanley of mismanaging its own employees’ 401(k) plan.
NEW YORK (TheStreet) — Sanford Heisler law firm partner Charles Field appeared on CNBC’s “Closing Bell” to discuss the company’s lawsuit accusing Morgan Stanley (MS) of causing “hundreds of millions of dollars” in losses to employees as a result of its mismanaged 401(k) plan.
The plaintiff, a participant of the company’s retirement plan, accuses the bank of investment options that have fees that are too expensive, as well as poor track records, Field said.
The retirement plan was constructed with “poor to mediocre” performers, including a number of Morgan Stanley’s own proprietary mutual funds, which were charged less than outside clients, according to the complaint. “A few were abysmal performers,” Field said of the bank’s own proprietary mutual funds.
The Employee Retirement Income Security Act of 1974, or ERISA, says that employers that set up retirement plans have to operate in the best interests of employees.
“Poor performance by itself is not necessarily a bad thing, but if you leave an investment on a plan for too long and don’t monitor the investment and remove it when you should have, then that is a violation of your duty under ERISA,” he said.
Because millions of American workers depend on 401(k) plans for their retirement, Field says this lawsuit goes beyond Morgan Stanley.
“American workers deposit their hard-earned savings in these accounts every paycheck because they expect that the employer will design a plan that has good investments, that has reasonable costs and that they’re monitoring these investments and these plans so that the people can retire and enjoy their retirement savings,” he explained.
Separately, TheStreet Ratings objectively rated this stock according to its “risk-adjusted” total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer’s view or that of this articles’s author.
TheStreet Ratings team rates Morgan Stanley as a Buy with a ratings score of B. This is driven by several positive factors, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.
You can view the full analysis from the report here: MS