401(k) Specialist Issue 3 - 2023 - 10

401(k) FIDUCIARY FILE
Senate Committee Approves Bill Expanding
Plan Access to Cannabis Companies
Under the bill, financial banking regulators could not penalize a depository
institution for providing banking services to a state-sanctioned
marijuana business, and cannot request nor require a depository institution
to terminate a deposit account unless (1) there is a valid reason,
such as the regulator has cause to believe that the depository institution
is engaging in an unsafe or unsound practice; and (2) reputational risk is
not the dispositive factor.
Additionally, proceeds from a transaction involving activities of a
THE CANNABIS INDUSTRY may soon offer retirement plans and other
financial services thanks to proposed legislation approved by the Senate
Banking, Housing, and Urban Affairs Committee.
The Committee approved the Secure and Fair Enforcement Regulation
(SAFER) Banking Act on September 27 in a 14-9 vote, now guaranteeing
its way onto the Senate for consideration. The bill would expand banking,
insurance, and financial services access, including employer-sponsored
retirement plans, to state-sanctioned marijuana businesses.
state-sanctioned marijuana business would no longer be considered
proceeds from unlawful activity.
Lastly, a financial institution, insurer, or federal agency may not be
held liable or subject to asset forfeiture under federal law for providing a
loan, mortgage, or other financial service to a state-sanctioned marijuana
business.
The SAFER Banking Act was introduced by Sen. Jeff Merkley (D-OR)
and saw support from 12 cosponsors including Sens. Steve Daine (R-MT),
Chuck Schumer (D-NY), Kyrsten Sinema (I-AZ), Cynthia Lummis (R-WY),
Kevin Cramer (R-ND), Cory Booker (D-NJ), Dan Sullivan (R-AK) and Robert
Menendez (D-NJ).
American Airlines Pushes Back on Amended
ESG Complaint
AMERICAN AIRLINES has again filed a motion to dismiss a lawsuit that
accuses the airline of improperly including and prioritizing environmental,
social, and governance (ESG) investments in the company's 401(k) plan.
In its motion, American Airlines pushed back on plaintiff Bryan P.
Spence's allegations, maintaining that the former pilot had never invested
in any of the 25 challenged funds.
The airline goes on to add that even if Spence had invested in one of
the challenged funds, his theory would be dismissed on the account that
American Airlines offers a self-directed brokerage account (SDBA), which
allows participants to choose " freely from thousands of mutual funds,
exchange-traded funds, and individual stocks at their own risk. "
Spence's second theory underlying his claims-that the plan should
not be using a broader list of managers with allegedly sub-par proxy
voting practices even to manage investment strategies that pursue purely
pecuniary objectives-also fails to state a claim, American Airlines argues.
Additionally, American Airlines says that Spence likewise alleges
nothing that remotely permits an inference that defendants selected the
Challenged Managers to serve their own financial interests or otherwise
engaged in acts of disloyalty.
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ISSUE 3 2023 | 401kSpecialist.com
Lastly, the motion calls out what they say is Spence's contradiction
in refusing to discuss historical returns of the plan's investment options,
noting that such irony undermines his proxy-voting theory.
American Airlines is asking the court to dismiss Spence's
amended complaint in its entirety, with prejudice.
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401(k) Specialist Issue 3 - 2023

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