Thread regarding Northern Trust Corp. layoffs

Fiduciary Lawsuits Raise ESG Governance Questions

The MSCI ESG Investor Snapshot on NTRS, dated May 31, 2022, noted Northern Trust client lawsuits under the category of Recent ESG Controversies.

Client lawsuits raise the question of whether NTRS Governance standards & practices fully meet legal requirements. Since the NT ESG Governance rating was below average, the external expert opinion suggests the lawsuits require examination.

Public News on Recent Fiduciary lawsuits against Northern Trust

“Allstate hit with second suit involving Northern Trust funds”., January 6, 2021.

“AutoZone sues Northern Trust over alleged ERISA violations”., September 27, 2021.

Walgreen Co. will pay $13.75 million and remove a suite of target date funds from Northern Trust from its 401(k) plan, ending an ERISA class action covering nearly 200,000 people. news.bloomberglaw, October 25, 2021.

“Northern Trust sued again for use of proprietary target-date funds”., June 8, 2021.

“Northern Trust Sued Over 'Poorly Performing' Target Date Funds” (BY CURRENT AND FORMER EMPLOYEES!!)., June 2, 2021.

“Northern Trust Faces New Fiduciary Breach Allegations. The plaintiffs argue the plan lost ‘tens of millions of dollars’ in retirement savings due to the retainment of Northern
Trust Focus Funds.”, June 7 2021.

“Northern Trust target dates called out in two 401(k) lawsuits”., November 30,2020.

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Post ID: @OP+1hml3lHO

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Below is the link to the AutoZone lawsuit reported by

Post ID: @qass+1hml3lHO

"Peiffer Wolf Carr Kane & Conway is investigating Northern Trust’s employee 401k accounts / Thrift-Incentive Plan / Northern Trust Focus Target Retirement Trusts. Our initial investigation has uncovered that Northern Trust may have made overly risky investment choices and failed to regularly monitor its employee’s 401k plan, causing employees to lose money in their retirement funds and suffer decreased employee benefits."

Post ID: @igwh+1hml3lHO

Following lawsuits by Northern's own employees against "No-Trust", the underperforming internally managed 401k funds were replaced with a competitor’s funds.

Pensions & Investments reported on June 29, 2022…

Northern Trust replaces proprietary target-date funds with BlackRock series
Northern Trust Corp., Chicago, replaced its own proprietary target-date fund lineup in its 401(k) plan with the BlackRock LifePath Index Fund series…

Two lawsuits had been filed in U.S. District Court in Chicago in November 2020 and June 2021 by 401(k) plan participants claiming the bank had violated its fiduciary duties under the Employee Retirement Income Security Act of 1974 by providing its own proprietary target-date series in the 401(k) plan.

The new 11-K filing does not say whether the change is connected to the lawsuits.

Post ID: @efrp+1hml3lHO

The U.K.'s Financial Conduct Authority (FCA) is investigating Northern Trust Corp. to determine if it was involved in the collapse of the Woodford Equity Income Fund.

The watchdog is probing whether the Chicago-based firm allowed illiquid holdings in the Equity Income Fund to surpass the 10% limit, which led to the fund's suspension in 2019.

In January, reports surfaced that the cost of winding up the equity income fund for investors would be at least £10 million. Link Fund Solutions has already paid £5 million for the past three months and the additional costs are estimated to be £5.3 million.

Post ID: @xir+1hml3lHO

Northern Trust sued over cash collateral losses

Northern Trust Global Investments and its parent, Northern Trust Co., are facing a lawsuit filed in U.S. District Court in Chicago by a participant in the $19.8 billion 401(k) plan of Exxon Mobil Corp., Irving, Texas, over losses from his investment in a Northern Trust S&P 500 index fund.

The lawsuit alleges Northern Trust breached its fiduciary responsibility under ERISA. It seeks damages for losses suffered by defined benefit plans and defined contribution plans stemming from the bank’s securities lending activities. Attorneys for the plaintiff, Joseph L. Diebold Jr., are seeking class-action status.

The complaint alleges that Northern Trust was imprudent in investing cash collateral pools or collective trusts in its securities lending program in illiquid and leveraged assets, which led to losses.

Post ID: @zev+1hml3lHO

PPL Corp. Sued Over Northern Trust Funds in Retirement Plans

PPL Corp. was sued Jan. 12, 2022 in federal court by current and former employees who say the Pennsylvania-based utility mismanaged its retirement plans by filling them with defective and underperforming target date funds from Northern Trust.

Post ID: @kzl+1hml3lHO

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