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ERISA Sequoia Fund Suit Revived After Being Moved to Arbitration

March 4, 2021, 4:26 PM

New York investment firm Ruane, Cunniff & Goldfarb must face a proposed class action over its Sequoia Fund after the Second Circuit on Thursday ruled that an arbitration agreement in DST Systems Inc.'s employee handbook didn’t block a former DST employee from bringing a class suit challenging the fund’s inclusion in his 401(k) plan.

Clive Cooper’s claims accusing Ruane of mismanaging the Sequoia Fund in violation of the Employee Retirement Income Security Act aren’t “related to” his employment and thus aren’t covered by DST’s arbitration agreement, the court said in a 2-1 split decision. Cooper’s claims “hinge entirely” on investment...

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