Goldman Must Face Claims of Self-Dealing Through Employee 401(k)

Goldman Sachs can’t dodge a proposed class action claiming it stacked its 401(k) plan with underperforming, high-fee proprietary funds to enrich itself at the expense of its employees, a Manhattan federal judge ruled Thursday.

“Plaintiff alleges millions in losses to the plan resulting from defendants’ decision,” Judge Edgardo Ramos wrote. “These allegations raise the specter that defendants maintained the GS funds” solely “for their own benefit” and “held proprietary funds to a different standard.”

The lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses the financial services giant of offering its own ...