A New York federal district court concluded that a defined benefit plan participant lacked standing to seek relief on behalf of plans other than the one in which he was a participant. In this case, plaintiff claimed that defendants breached ERISA fiduciary duties and engaged in prohibited transactions by charging undisclosed markups for securities trades. The court concluded that plaintiff could pursue his claim only with respect to the plan in which he participated because the defendants’ alleged improper charges for that plan would not resolve whether, when, and in what amount defendants charged undisclosed markups to other plans.

The court also dismissed the plaintiff’s fiduciary breach claims, finding that he failed to plausibly allege that the defendants had discretion over the disposition of plan assets such that they could be deemed functional fiduciaries. In so ruling, the court rejected plaintiff’s argument that the defendants became fiduciaries with respect to the markups by virtue of the discretion they exercised over their own compensation. The court concluded that the markups depended on a number of factors outside the defendants’ control, such as the type of customer, time of day, the time and amount of securities being traded, and the market price. The case is Fletcher v. Convergex Group LLC, No. 13-cv-9150, 2019 WL 3242586 (S.D.N.Y. July 2, 2019).

Photo of Neil V. Shah Neil V. Shah

Neil V. Shah is an associate in the Labor & Employment Law Department and a member of the Employee Benefits & Executive Compensation Group, where he focuses on ERISA litigation.

Neil represents plan sponsors, trustees, and other fiduciaries in ERISA class actions for…

Neil V. Shah is an associate in the Labor & Employment Law Department and a member of the Employee Benefits & Executive Compensation Group, where he focuses on ERISA litigation.

Neil represents plan sponsors, trustees, and other fiduciaries in ERISA class actions for breach of fiduciary duty arising out of investment losses and prohibited transactions, as well as Department of Labor and other governmental and internal investigations.  Neil also counsels both employers and multiemployer funds regarding the assessment and collection of delinquent contributions and withdrawal liability.

Prior to joining Proskauer, Neil was an associate at a large regional firm, where he litigated individual and class actions involving challenges to insurer claims adjudication procedures under ERISA, fraud recoveries against healthcare providers, and claims for benefits.

Neil has authored several articles, including those published in the New Jersey Law Journal and Bloomberg National Affairs. He is also a frequent contributor to Proskauer’s Employee Benefits & Executive Compensation Blog.