Allen v. Credit Suisse Sec. (USA) LLC, 895 F.3d 214

Plaintiffs (ERISA plan participants/trustees) sued twelve banks alleging they manipulated foreign-exchange (FX) benchmark fixes and order execution from 2003–2014, increasing costs to ERISA Plans when investment managers arranged FX transactions.
The banks executed FX trades—including WM/Reuters 4:00 p.m. benchmark transactions—pursuant to instructions or written authorizations from independent plan investment managers.
Plaintiffs alleged banks manipulated benchmarks and order flows (clearing decks, netting orders, front-running, platform holds) and coordinated spreads to increase markups.
Claims included ERISA fiduciary-breach counts (§ 404), prohibited transactions (§ 406), and a non-fiduciary knowing-participation claim; plaintiffs sought class relief.
District court dismissed for failure to plead that banks were ERISA functional fiduciaries (no control over disposition of plan assets) and that non‑fiduciary party‑in‑interest claims lacked necessary knowledge allegations; plaintiffs’ motion for adjournment and further amendment was denied.
On de novo review, the Second Circuit affirmed: alleged misconduct did not plausibly establish the requisite control to create ERISA functional fiduciary status, nor supported the alternative party‑in‑interest theory; denial of adjournment/leave to amend was not an abuse of discretion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether banks were ERISA functional fiduciaries when executing FX transactions	Banks exercised control over plan assets by manipulating benchmark fixes and thereby determining their compensation	Transactions were ordinary arms‑length FX executions under written instructions from independent plan managers; banks lacked authority to control disposition of plan assets	Banks were not functional fiduciaries; complaint failed to plausibly allege requisite control
Whether plaintiffs may hold non‑fiduciary banks liable for knowing participation in prohibited transactions (§ 406)	Even non‑fiduciary banks can be liable if they knowingly participated in transactions with fiduciary banks that manipulated rates	No defendant was shown to be a fiduciary; knowledge-based § 406 claim depends on fiduciary predicate and specific knowledge allegations	Party‑in‑interest claim fails because no defendant was plausibly a functional fiduciary and plaintiffs did not plead the required knowledge theory independently
Whether district court abused discretion by denying adjournment and leave to amend to search for contracts	Additional investigation might reveal contracts showing control or indicia of fiduciary status	Plaintiffs had multiple prior amendments and offered only speculative, unsupported assertions about contracts; delay was unexplained	Denial affirmed; plaintiffs failed to show diligence or explain how amendment would cure pleading defects

Pegram v. Herdrich, 530 U.S. 211 (statutory threshold: fiduciary status requires acting in fiduciary capacity for the challenged conduct)
Blatt v. Marshall & Lassman, 812 F.2d 810 (possession or exercise of authority/control over plan assets is central to ERISA fiduciary definition)
Bouboulis v. Transp. Workers Union of Am., 442 F.3d 55 (de facto fiduciary status turns on exercise of control or discretion)
United States v. Glick, 142 F.3d 520 (agent becomes fiduciary where it exercises unhampered discretion in setting compensation)
Geller v. Cty. Line Auto Sales, Inc., 86 F.3d 18 (fraud in performing non‑fiduciary services does not convert provider into ERISA fiduciary)
Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Const., 779 F.3d 182 (example of functional fiduciary where party controlled disbursement decisions)
Frommert v. Conkright, 433 F.3d 254 (ERISA construed liberally in remedial fashion)