As many of you know, Local 802 members Andy Snitzer and Paul Livant filed a class action lawsuit against the AFM-EPF trustees, charging them with breaches of fiduciary duty. Trustees Ray Hair and Tino Gagliardi repeatedly called the lawsuit “frivolous.” But the federal judge overseeing the case believes it is not frivolous, and on April 26, entered an order denying the trustees’ attempt to have the case dismissed. The case will now proceed with discovery and an eventual trial.
The complaint charges that our trustees breached their fiduciary duties by making outsized bets on two risky investment strategies: emerging markets equities and private equity funds. It also alleges that the trustees allowed themselves to be overcharged by investment managers. If the plan’s assets instead were put in Vanguard Balanced Index Funds, the AFM-EPF would have earned hundreds of millions of dollars more from 2010 to 2017.
The plaintiffs allege that our trustees managed the investments without sufficient processes, standards or guidance to monitor, evaluate or make prudent decisions concerning underperforming investment managers.
Finally, the complaint alleges that our trustees acted disloyally in withholding important plan information from participants regarding the plan’s investments and financial condition.
MPS applauds the courage of plaintiffs Andy Snitzer and Paul Livant in their effort to hold the trustees accountable. We are pleased that the federal judge overseeing this case has decided to give the plaintiffs a chance to prove their case in a court of law.
(This article was revised at 2:42pm for formatting issues)