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Suit involving regulatory compliance filed against Intel

When retirement plan investment professionals in California intentionally make decisions that are not in the best interests of their clients, they may be held liable. In one out-of-state case involving regulatory compliance, Intel Corporation faces a suit filed by a person who participates in retirements plans sponsored by the company. The suit alleges that Intel's investment practices have contributed to the improper investment of many participants' funds.

According to the complaint, the investment committee adopted asset-allocation models that were not in line with the standards used by today's investment plan fiduciaries. He said the defendants specifically invested a large amount of the plan participants' assets in high-cost and risky private equity and hedge fund investments. In fact, Intel's investments in hedge funds jumped to a whopping $680 million from just $50 million, a rise of 1,300 percent.

The defendants' actions allegedly caused plan participants to lose massive amounts of money while forcing them to pay excessive fees. The defendants have therefore been accused of breaching their fiduciary duties. The plaintiff filed the suit on behalf of people participating in both Intel's retirement contribution plan and its 401(k) savings plan.

People in California depend on investment professionals to make prudent decisions about how their dollars will be invested; after all, their financial futures are at stake. Unfortunately, sometimes investment committees fail in the area of regulatory compliance and make unsuitable investments, thus hurting the people they are supposed to be helping. Appropriate legal guidance may help people to try to hold these parties accountable through the civil court system.

Source: planadviser.com, "Intel Lawsuit Questions Custom Target-Date Fund Construction", Rebecca Moore, November 2, 2015

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