James Mehling, a former vice president of New York Life Insurance Company in New York, last week filed a class action lawsuit, charging that New York Life improperly shifted assets held in both a company-sponsored pension plan and a 401(k) plan and used them as seed money for new proprietary institutional mutual funds.
The suit, filed in federal district court in Philadelphia, charges that New York Life improperly realized gains from the Mainstay Institutional Funds' fees that were alleged to be high, and further used the institutional funds' assets as a lure to convince other outside clients to invest in the funds. The lawsuit also charges that the funds' had "spotty" performance, which violates New York Life's ERISA duties regarding "due care" of its employees' retirement assets.
Mehling also alleges that he was fired without just cause because New York Life wanted to prevent him from blowing the whistle on what he alleges is a fraudulent scheme.
The law firm of Sprenger & Lang of Philadelphia is representing Mehling.