A class action lawsuit was brought forth by former 457 plan participants in run by Empower Retirement and affiliates Great-West Funds and Putnam.
The lawsuit was filed under the Investment Advisers Act, the federal law that regulates investment advisers.
Additional defendants are Advised Assets Group, Great-West Lifeco, Great-West Life & Annuity Insurance Company, Empower Annuity Insurance Company of America and Empower Advisory Group.
The lawsuit alleges Empower used deceitful sales practices to boost use of managed accounts and that fraudulent sales practices comprised a breach of fiduciary duty to participants. It is alleged that Empower told government plan advisers to use fraudulent sales tactics that caused employees to sign up for the higher fee managed account option, filled with Empower-affiliated Great-West and Putnam funds and owned by Empower.
The lawsuit seeks class action status. The complaint was filed in U.S. District Court for the District of Colorado.