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An Illinois federal judge has approved a $2.25 million settlement that accounting firm BDO USA LLP agreed to pay to resolve allegations that it failed to ensure proper evaluation of employee 401(k) retirement plan funds.

U.S. District Judge Matthew F. Kennelly granted final approval of the settlement on Monday following a telephonic hearing. The resolution brings an end to the Employee Retirement Income Security Act (ERISA) claims filed against BDO by plaintiffs Patrick Gaines, Jessica Kelly, and Anthony Tse, representing the affected employees. The deal promises significant financial relief to both current and former participants of BDO's retirement plan.

BDO's $2.25M Deal Ending 401(k) Suit Gets OK : Allegations Against BDO

The lawsuit, filed in 2022, claimed that BDO's 401(k) plan, which qualified as a "mega plan" with $1.2 billion in net assets and more than 11,000 participants, included expensive and underperforming funds. Employees alleged that the firm failed to seek out better investment options, thereby compromising the financial growth of the retirement funds.

Mediation and Settlement

After an unsuccessful attempt by BDO to dismiss the case, both parties requested that Judge Kennelly stay the proceedings to allow for mediation. This mediation led to the December settlement, which has now been formally approved.

BDO's $2.25M Deal Ending 401(k) Suit Gets OK : Legal Representation

The plaintiffs are represented by attorneys Donald R. Reavey and Mark K. Gyandoh of Capozzi Adler PC, and Eric Lechtzin and Marc H. Edelson of Edelson Lechtzin LLP. BDO's legal team includes Allyson E. Riemma and J. Christian Nemeth of McDermott Will & Emery LLP.

Moving Forward

With this settlement, BDO aims to resolve the disputes and provide fair compensation to the employees affected by the alleged mismanagement of the 401(k) funds. This $2.25 million deal marks a significant step towards addressing the financial grievances of the plan participants and upholding the integrity of retirement plan management.