ST. LOUIS — An appeals court has upheld a $3.2 million settlement in litigation that accused Edward Jones' 401(k) plan of picking investment funds based on whether it had a relationship with the funds' providers.
The 2016 class-action suit said Edward Jones forced the plan to charge excessive fees that benefited the company's mutual fund partners, plus charged excessive administrative fees. The company denied wrongdoing.
A settlement was reached in 2018, but an objector, Shiyang Huang, in 2019 said it shouldn't have been approved because the employees lacked standing. He said the deal improperly covered former plan participants and gave named plaintiffs $10,000 incentive awards they didn't deserve.
But the U.S. Court of Appeals for the Eighth Circuit on Jan. 31 said the plaintiffs had standing to bring the class action and that a district court did not abuse its discretion in granting awards.
Edward Jones is one of the St. Louis region's largest employers, with about 6,500 local employees included in its roughly 44,500 companywide workforce, and one of its largest securities broker-dealers, according to Business Journal research.
The privately held company reported full-year 2019 net revenue of nearly $9.4 billion, up 11% from $8.5 billion in 2018. Net income before allocations to the partners, who own the firm, totaled nearly $1.1 billion last year, 10% more than the $990 million in 2018. The firm reported it ended 2019 with 18,704 financial advisers, a 6% increase from 17,615 a year earlier. Client assets under management at year end totaled nearly $1.35 trillion, up 22% from the end of 2018.
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