Investment manager Capital Group Cos. stumbled in its effort to send litigation over the affiliated American Funds in its employees’ 401(k) plan to arbitration, when a federal judge said in a tentative ruling that the case should stay in court.
The arbitration provision in Capital Group’s retirement plan limits participants to bringing claims in individualized arbitration and recovering only losses tied to their individual accounts, Judge George H. Wu of the US District Court for the Central District of California said. This is an invalid prospective waiver of the right to seek plan-wide relief, which is a statutory right granted …