Washington, D.C., counsel Bradford Campbell spoke to Reuters about the reported U.S. Department of Labor inquiry into whether JPMorgan Chase & Co violated its fiduciary duty under the Employee Retirement Income Security Act (ERISA) in connection with one of its stable value funds.
Stable value funds are used in as much as 80 percent of 401(k) self-directed retirement plans and are generally considered a lower-risk investment for employees. The allegations concern the as much as 13% of the $1.8 billion JPMorgan Stable Asset Income Fund invested in private mortgage debt underwritten and rated by the bank itself.
The Labor Department is reportedly examining whether this concentration in assets related to its other operations by the New York-based bank breached its fiduciary responsibilities under ERISA, which requires fiduciaries to act in the sole interest of plan participants.
Brad, a member of the Employee Benefits & Executive Compensation Practice Group and former head of the Labor Department’s Employee Benefits Security Administration, said that if the Labor Department is conducting a formal investigation and finds that JPMorgan did not act in the best interest of plan participants, the agency could sue the firm on behalf of the plans.
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