Former employee sues Caesars Entertainment for not controlling its retirement plan
By Bob Garcia
The casino operator is accused of costing employees millions by not providing better oversight
Both Caesars Entertainment and the casino giant’s employee retirement fund manager, Russell Investments, are now facing a federal lawsuit filed by a former employee. Maggie Thomson has launched legal action against Caesars and Russell because they failed to follow proper processes for handling their fiduciary responsibilities with regards to the casino operator’s 401(k) plan. That irresponsibility caused more than $100 million invested by workers participating in the company’s 401(k) program to be essentially flushed down the drain, asserts Thomson.
According to the lawsuit, when Caesars outsourced the money management of its retirement program to Russell, the benefit to the investment firm was not at all correct, as the firm reportedly transferred nearly all of the investment options to its own, failing proprietary funds. “Russell gained control of the Plan’s investment menu in 2017 and quickly filled the Plan with its own underperforming proprietary funds. Russell’s tactic was a lifeline for his distressed funds and brought in $1.4 billion in new investments at a critical time when other plan sponsors were abandoning Russell’s funds,” says the lawsuit filed in the US District Court of Nevada states.
This lack of stewardship, regulation, and seriousness caused many employees to become upset and Thomson clearly did not want to sit idly by. Russel, through a statement, flatly rejected the lawsuit, stating, “We believe this lawsuit is without merit and intend to vigorously defend the firm against these allegations.”
Thomson, who joined the casino over six years ago as a marketing analyst in Las Vegas, believes this legal process has been more than fair and necessary and is seeking participation from other employees or former employees who agree.