ABB Ltd.'s U.S. unit and its retirement plan managers cost plan participants more than $35 million through breaches of fiduciary duty, a U.S. judge ruled.
ABB Inc. and managers of its Personal Retirement Investment and Savings Management (Prism) plans failed to control record-keeping fees and didn't pursue rebates, for which U.S. District Judge Nanette K. Laughrey in Kansas City, Missouri, found them liable for $13.4 million.
They lost $21.8 million more by approving the transfer of assets from a Vanguard Group Inc. fund to a Fidelity Investments fund, she said in her 81-page March 31 ruling.
Recommended For You
"The court finds that the plan must be compensated for its losses and any ill-gotten gains by defendants when they used plan assets for their own benefit," Laughrey ruled, finding two Fidelity units liable for $1.7 million she called "lost float" interest earned on overnight transactions.
ABB Ltd. is a maker of power generation, transmission and distribution products, instrumentation and control systems. Its headquarters is in Zurich.
Its U.S. unit, based in Cary, North Carolina, offered union and non-union workers comparable Prism plans, matching 50 percent of participant contributions to the company's 401(k) plan as much as 6 percent of their annual pay, according to the court's ruling.
"The Prism plan was used by ABB to attract and retain employees," Laughrey said. Fidelity Trust acted as its record-keeper.
The group lawsuit was filed in December 2006 on behalf of a class of more than 12,800 participants, according to the complaint. It was tried before Laughrey without a jury in January 2010.
"Our executives are reviewing the decision," ABB spokesman Barry Dillon said in a telephone interview. The company is "evaluating all options including the possibility of an appeal," he said.
Fidelity's corporate media department didn't immediately reply to an after-hours e-mail request for comment.
The case is Tussey v. ABB Inc., 06cv4305, U.S. District Court, Western District of Missouri (Kansas City).
Bloomberg News
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
