Janus Henderson Settles ESOP Lawsuit for $6.5M

Asset manager Janus Henderson agreed to a $6.5 million settlement of a complaint that accused the firm of stuffing its Janus 401(k) and Employee Stock Ownership Plan with allegedly poorly performing proprietary funds burdened by high fees and that lacked proper oversight.

The complaint, Schissler v. Janus Henderson US (Holdings) Inc. et al., filed in September 2022 in U.S. District Court for the District of Colorado, accused the plan’s fiduciaries of breaching their duties under the Employee Retirement Income Security Act by failing to act prudently and in the best interests of plan participants and beneficiaries when the fiduciaries allegedly used the Janus plan to promote their proprietary investments. The plaintiffs claimed that the move was intended to earn profits for Janus by charging high fees and providing poor investment performance compared with nonproprietary investment options selected by similarly sized plans that were cheaper and performed better.

According to the court documents, “the $6.5 million settlement represents a gross recovery of approximately $3,100 per class member and roughly 14%-37% of the total losses alleged, depending on which damages model the court adopted.”

The Janus 401(k) and Employee Stock Ownership Plan had approximately $545 million in assets with 1,799 participants as of 2024, according to its most recent Form 5500 filing.

Based on the settlement figure and the number of participants, each employee would receive $3,613, but the reward will likely be smaller, since the plaintiffs’ lawyers have not been awarded their share yet and could receive up to one-third of the total settlement amount.

As part of the settlement, Janus Henderson agreed to amend its retirement plans to provide more oversight and to review the performance of its proprietary funds.

In 2025, 94 of the 155 fiduciary complaints filed alleged excessive fees or imprudent investment allegations, according to Encore Fiduciary. Also last year, there were at least 27 settlements of underperformance or excessive fee complaints, according to Davis & Harman, a law firm that defends employers in ERISA disputes.

Jackson Lewis PC, Nichols Kaster PLLP and Daniel P. Suitor PLLC represented the plaintiffs, while Holland & Hart LLP, Cadwalader Wickersham & Taft LLP and Vinson & Elkins represented the defendants.

“While Janus Henderson continues to believe this suit is without merit, we are pleased to have reached an agreement in principle to settle this legacy matter,” a company spokesperson said in a statement.

Trian Fund Management and General Catalyst Group are in the process of taking Janus Henderson private after shareholders approved the deal last month. The transaction is expected to close in the middle of the year, according the company.