Waddell & Reed Inks $4.9M Deal in 401(k) In-House Funds Suit

Waddell & Reed Financial Inc. reached a $4.9 million deal in a lawsuit accusing it of loading its 401(k) plan with affiliated investment funds that carried excessive fees and performed poorly.

The settlement, if approved by the court, will benefit 4,487 participants in Waddell & Reed’s 401(k) plan, according to documents filed Nov. 19 in the U.S. District Court for the District of Kansas.

More than two dozen financial companies have been sued in recent years over the affiliated mutual funds in their 401(k) plans. The lawsuits allege, in general, that the funds perform poorly and carried high fees that ...