Federal Securities Law Doesn’t Preempt Trust Beneficiaries’ Class Action Claims That BNY Mellon Breached Fiduciary Duties
A U.S. District Court judge ruled that a federal securities law does not preclude a state class action suit brought by a trust beneficiary claiming a breach of fiduciary duty by a trustee.
Attorneys John Roddy of Bailey & Glasser’s Boston office and Gregory Porter of the firm’s Washington, DC office, with California and Washington, D.C. co-counsel, represent Ashby Henderson, the plaintiff in the case.
The trustee, Bank of New York Mellon, argued that the federal Securities Litigation Uniform Standards Act, which limits class actions lawsuits for securities fraud, precluded Ms. Henderson’s claims that BNY Mellon invested trust assets in mutual funds owned or managed by BNY Mellon, or investments in which BNY Mellon had a financial stake.
But Judge Patti B. Saris said the allegations involved “a breach of fiduciary duty through imprudent decisions, not fraud and deceit.” Ms. Henderson claimed that because of its financial interest in the challenged investments, BNY Mellon’s investment decisions were made for its own benefit rather than in the best interest of trust beneficiaries.
Massachusetts Lawyers Weekly featured the case in a front page article, which noted that it had important national ramifications and could resolve what has been a hotly contested issue.Contact Form »