Former Wells Fargo Employees Filed 401(k) Lawsuit
Five former employees filed a class action lawsuit alleging more than $1 billion in retirement plan losses.
Updated on Oct. 6, 2026 in Retirement Planning
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Five former Wells Fargo employees filed a proposed class action lawsuit in U.S. District Court. The complaint alleges that the company retirement plan suffered losses exceeding $1 billion due to underperforming investments.
Why it matters
The lawsuit highlights concerns over fiduciary responsibility in corporate retirement plans when selected investment options underperform compared to standard benchmarks. It calls into question the selection of specific actively managed mutual funds and target-date funds within employee portfolios.
The legal action targets the management of actively managed mutual funds and State Street target-date funds. The plaintiffs claim these assets failed to meet performance benchmarks, resulting in significant plan losses.
The players
Wells Fargo
Wells Fargo is a multinational financial services company that provides banking, investment, mortgage, and consumer and commercial finance products.
State Street
State Street is a global financial services and bank holding company that offers investment management and research services.
The details
The legal complaint challenges the investment performance of two actively managed mutual funds alongside State Street target-date funds. Plaintiffs allege these vehicles underperformed when compared to similar investment options available in the market.
Timeline
The lawsuit was officially filed in U.S. District Court on October 5, 2026.
Market Dynamics
This lawsuit follows a long-standing pattern of ERISA litigation aimed at holding plan sponsors accountable for the performance of selected retirement investment options. It reflects ongoing scrutiny of fiduciary duty in managing corporate retirement accounts against historical precedents like the Tibble v. Edison International case.
For current or former employees with similar retirement plans, this filing underscores the importance of monitoring the expense ratios and relative performance of mutual funds selected for 401(k) portfolios. It suggests that participants should periodically review their plan documents to understand the oversight responsibilities held by their employer.
The takeaway
Retirement plan participants should actively review the investment options and historical performance reports provided by their plan administrators. Diversification and awareness of fund benchmarks are essential tools for identifying when investment choices may not be serving the best interests of the account holder.
Further reading
Learn more about employer-sponsored savings plans in the Retirement Planning section.
Source note: This article includes information reported by Bloomberglaw.
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