Michelle Capezza Quoted in “Estee Lauder, Alight Settle 401(k) Account Takeover Suit”

Ignites

Michelle Capezza, Member of the Firm in the Employee Benefits and Health Care & Life Sciences practices, in the firm’s New York office, was quoted in Ignites, in “Estee Lauder, Alight Settle 401(k) Account Takeover Suit,” by Beagan Wilcox Volz. (Read the full version – subscription required.)

Following is an excerpt:

A former Estee Lauder employee has settled a lawsuit with the cosmetics company and its 401(k) plan service providers, which she claimed failed to identify and stop fraudulent distribution requests that drained her account of $100,000, according to court documents.

Terms of the “settlement in principle” were not disclosed. …

Most of the biggest recordkeepers offer plan participants a “security guarantee,” which provides that the recordkeeper will reimburse participants whose accounts are hacked as long as they’ve followed certain security protocols, such as maintaining anti-virus and anti-spyware software.

Plan sponsors should ensure that their recordkeeper’s stated security guarantee is actually part of their service contract, says Michelle Capezza, a partner at Epstein Becker Green.

“If it’s an isolated case, I’m sure [the security guarantee] would be honored,” she says. But if numerous accounts have been hacked across the plan, “I think that would be a big litigation,” she adds.