If you or your company had an investment account at a bank, investment advisory firm or other financial institution that swept uninvested money into a cash sweep account with an unfairly low interest rate, you may be entitled to compensation from a cash sweep account class action lawsuit or settlement.
A team of class action attorneys and securities lawyers is investigating potential class action lawsuit cases of individuals and businesses who had an investment account at a bank, investment advisory firm or other financial institution that swept uninvested money into a cash sweep account with an unfairly low interest rate.
A cash sweep account is a special type of account that automatically “sweeps” uninvested customer cash balances from investment accounts into interest-bearing deposit accounts at various banks or brokerages.
Unfortunately, according to reports, investors may have been underpaid billions of dollars by brokerage firms and affiliate banks who may have paid investors unreasonably low interest rates in cash sweep accounts. This has reportedly allowed financial institutions, who make “net interest income” on the difference between the interest paid to customers and the interest the banks earn when loaning the sweep deposits, to reap massive profits at the expense of their customers.
Cash Sweep Account Class Action Lawsuit Cases
Cash sweep class action lawsuit cases potentially being investigated include claims of individual and businesses who had a discretionary, IRA or other investment account that swept uninvested cash balances into a cash sweep account, at a bank or other financial institution, including:
- American Enterprise Investment Services
- Ameriprise Financial Services
- Bank of America
- E*Trade Securities LLC
- Edward Jones
- Fidelity Investments
- J.P. Morgan Securities LLC
- JPMorgan Chase & Co.
- Merrill Lynch
- Morgan Stanley Smith Barney LLC
- National Financial Services, LLC
- PNC Financial Services Group, Inc.
- PNC Investments, LLC
- Raymond James Financial, Inc.
- Stifel Financial
- UBS Financial Services Inc.
- Wells Fargo Advisors
- Other banks and investment advisory firms
The cash sweep class action lawsuits allege, among other things, that the various defendant financial institutions unlawfully used customer cash to generate revenue while paying unreasonably low, below-market interest rates to customers. According to the lawsuits, because paying customers lower interest rates increases financial institution profitability, these cash sweep programs present a conflict of interest.
On October 20, 2024 Plaintiffs in cash sweep account lawsuits filed a motion with the Judicial Panel on Multi-District Litigation (“JPML”), styled as In Re Cash Sweep Litigation, MDL Case No. 3136, seeking to transfer federal cash sweep class action cases into multi-district litigation (MDL) in the U.S. District Court for the Southern District of New York for consolidation and coordination of pretrial proceedings.
Defendants in the cash sweep account lawsuits have included financial services companies, such as banks and brokerage firms, who offer “cash sweep” programs to their customers.
Investors Seek To Recover Damages For Alleged Underpaid Interest In Cash Sweep Accounts
The cash sweep class action lawsuit complaints have asserted claims for, among other things, breach of fiduciary duty, gross negligence, breach of implied covenant of good faith and fair dealing and breach of contract. Plaintiffs in the cash sweep class action lawsuits seek, among other things, monetary relief, including actual damages, equitable relief, restitution, and disgorgement, the costs of litigation, reasonable attorneys’ fees, pre- and post-judgment interest and injunctive relief.
Time Is Limited To File A Cash Sweep Lawsuit
Deadlines known as statutes of limitation may limit the time that investors have to file a cash sweep account lawsuit to try to recover compensation for underpaid interest in their cash sweep accounts.
This means that if a cash sweep account lawsuit claim is not filed before the applicable deadline or limitations period, the investor may be barred from ever pursuing litigation or taking legal action regarding their cash sweep account lawsuit claim. That is why it is important to connect with a class action lawyer or attorney as soon as possible.
If you or your company had a cash sweep account at a bank, investment advisory firm or other financial institution with an unfairly low interest rate, you may be eligible to recover money from class action lawsuit case or settlement claim. Contact a class action lawyer to request a free case review.
*The listing of a company (e.g., American Enterprise Investment Services, Ameriprise Financial Service, Bank of America, E*Trade Securities LLC, Edward Jones, Fidelity Investments, J.P. Morgan Securities LLC, JPMorgan Chase & Co., Merrill Lynch, Morgan Stanley Smith Barney LLC, National Financial Services, LLC, PNC Financial Services Group, Inc., PNC Investments, LLC, Raymond James Financial, Inc., Stifel Financial, UBS Financial Services Inc., Wells Fargo Advisors, etc.) is not meant to state or imply that the company acted illegally or improperly; rather only that an investigation may be, is or was being conducted to determine whether legal rights have been violated.
**The use of any trademarks, tradenames or service marks is solely for product identification and/or informational purposes.
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