May 5, 2022
White, Graham, Buckley & Carr partners Bryan White, Gene Graham and William Carr’s ongoing class action lawsuit on behalf of employees of SS&C Technologies and several former employees of DST Systems was recently featured in a Kansas City Star article. The firm first filed its case in 2017, claiming violations of the Employee Retirement Income Security Act (ERISA) in relation to an investment in the firm’s 401(k) profit-sharing plan.
The article, DST Workers Face ‘Shameless Duplicity’ in Legal Fight Over Retirement Plan, outlines the plight of a former DST employee who lost his retirement savings due to the imprudent Valeant Pharmaceuticals investments.
After a federal judge dismissed the nationwide lawsuit in 2017, holding that the matter could not be handled as a class or representative claim, four Kansas City-area law firms teamed up to take on DST in arbitration. After a success rate of nearly 90% of the first 385 cases presented to arbitrators, the case now stands in limbo. A federal judge in the Western District of Missouri confirmed the first 177 arbitration awards and wrote in the order that DST’s suggestion that they should be nullified was “anathema.” Then, a federal judge in New York said the arbitrations should be stayed and indicated the awards could be invalid. Both rulings are being appealed to higher courts.
The original filing states that a portion of the plan’s assets is invested in the DST Systems Inc. Master Trust, which is managed by defendant Ruane, Cunniff & Goldfarb L.P. Ruane is also the distributor and adviser to the Sequoia Fund Inc., a former client of DST. Participants could not exercise control of their investments in the profit-sharing plan.
The claimants alleged that DST was aware that that the profit-sharing plan was not properly diversified, and that rather than minimizing the risk of large losses to the plan, the plan’s fiduciaries caused and allowed plan assets to be invested imprudently in the stock of Valeant Pharmaceuticals International Inc., leading to enormous losses in the plan and all participants when the stock dropped precipitously from July 31, 2015, to January 10, 2016.