The second of two lawsuits filed against large banks in as many weeks, if decided in favor of the various plaintiffs, has the potential to threaten the entire landscape of bank proprietary mutual funds.

What is more, similar lawsuits against additional banks that sponsor proprietary mutual funds and jumpstarted their fund groups through trust account conversions are on their way to court on behalf of other plaintiffs. The suits charge that banks knowingly breached their fiduciary duties by acting in their self-interest in funneling trust assets into proprietary mutual funds.

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