Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Class action administrators and banks named in suit alleging secret kickback scheme that suppressed settlement payouts, (Mar 3, 2026)

By Wendy Biddle, J.D.

The complaint targets nine of the country's largest class action settlement administrators.

A putative class action filed in federal court in New Jersey is seeking to unravel what plaintiffs describe as a years-long kickback scheme involving some of the most prominent names in class action settlement administration. The complaint, filed on behalf of four named plaintiffs and potentially hundreds of thousands of class members nationwide, names nine settlement administrators and two regional banks, accusing them of colluding since 2021 to siphon undisclosed payments from settlement funds at the expense of hundreds of thousands of class members who received below-market interest on their awards (Coughlan v. Angeion Group LLC, No. 2:26-cv-02113-BRM-CF (D.N.J. Feb. 27, 2026)).

The Administrator Defendants (Epiq Systems, Inc., Angeion Group LLC, JND Legal Administration, Kroll Settlement Administration LLC, Verita Global LLC, Archer Systems LLC, Verus LLC, CPT Group Inc., and Simpluris Inc.) collectively control more than 65 percent of the market for class action settlement administration services in the United States, according to the complaint. The two Bank Defendants, Huntington National Bank and Western Alliance Bank, together hold more than 80 percent of the market for qualified settlement fund (QSF) deposits in U.S. class and mass actions.

The alleged scheme. According to the complaint, the scheme began around 2021, when rapidly rising U.S. interest rates created a lucrative opportunity: billions of dollars in class action settlement proceeds held in QSF accounts could now generate substantial returns. Plaintiffs allege that the Administrator Defendants recognized this opportunity and demanded a share of the profits from the Bank Defendants, threatening to move settlement deposits to competing institutions if the banks refused. The Bank Defendants allegedly agreed, and a coordinated arrangement was born.

Under the terms of the alleged arrangement, the Bank Defendants would pay the Administrator Defendants a portion of the spread between the artificially low interest rates reported to courts and class members and the actual market rate on interest-bearing accounts. In exchange, the Administrator Defendants agreed to continue placing all settlement deposits exclusively with the two Bank Defendants. The complaint alleges that both Bank Defendants then coordinated to offer identical, below-market bids on QSF accounts—at rates consistently below 0.5 percent annually—while the prevailing federal window interest rate ranged between roughly 3.75 and 4.33 percent during the relevant period.

To conceal the payments, the complaint alleges that the Administrator Defendants formed special purpose entities (SPEs) to receive the kickbacks. The Bank Defendants allegedly channeled the payments into these SPEs with full knowledge of their purpose. The existence of these entities and the flows of money through them were never disclosed to the courts overseeing the settlements, to class counsel, or to class members.

Specific cases cited. The complaint details a number of high-profile settlements in which it alleges the scheme was operating. In In re: Capital One Consumer Data Security Breach Litigation, a case involving approximately 97 million class members, Defendant Epiq served as settlement administrator and Defendant Huntington served as the QSF trustee bank. The complaint alleges that the interest reported on the Capital One settlement fund was below 0.5 percent while the market rate on comparable accounts was between 4 and 6 percent, and that Huntington paid Epiq the difference through undisclosed channels.

Similar allegations are made with respect to In re: Yahoo! Inc. Customer Data Security Breach Litigation, a case involving roughly 194 million class members in which Kroll's predecessor entity served as administrator and Western Alliance served as trustee bank. The complaint also identifies Jowharah Hameed-Bolden v. Forever 21 Retail, Culbertson v. Deloitte Consulting LLP, and several others as cases in which interest was reported below 0.5 percent while market rates were materially higher, with the defendant administrators allegedly receiving undisclosed payments representing the difference.

Fiduciary duties and court oversight. Central to the plaintiffs' theory is the fiduciary relationship between class action administrators, trustee banks, and the class members they serve. The complaint emphasizes that both the Administrator Defendants and the Bank Defendants are appointed by, and report to, the supervising court in each class action. As court-appointed fiduciaries, they are legally required to act in the exclusive interest of class members and to make complete, accurate disclosures of all material compensation arrangements as part of the preliminary and final approval processes.

The complaint contends that in every settlement at issue, the defendants not only failed to disclose the kickback arrangements to courts but affirmatively misrepresented the full scope of their compensation. Class settlement notices and settlement websites, which courts require to disclose all material terms so that class members can decide whether to participate or object, never mentioned the additional remuneration the administrators were receiving. According to the complaint, no court has ever approved the undisclosed payments, and none would have: "No court would have approved any settlement with such kickbacks; the parties to the settlements would have demanded that the Defendants be fired."

The complaint also alleges that the scheme was shielded from disclosure to state Attorneys General, who receive mandatory notices under the Class Action Fairness Act and have standing to object to settlements they find unreasonable.

Legal claims. The complaint asserts ten counts against the defendants in various combinations. All defendants face claims for breach of fiduciary duty, breach of implied contract, unjust enrichment, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) under both 18 U.S.C. § 1962(c) and § 1962(d). The RICO enterprise theory rests on allegations of wire and mail fraud, as the complaint identifies class member notices, administrator-to-bank communications, and court filings as the wires and mailings used to carry out the fraudulent scheme.

The Administrator Defendants additionally face claims for common law fraud, violation of Section 1 of the Sherman Antitrust Act, negligent misrepresentation, and negligence. A separate Sherman Act Section 1 count is brought solely against the Bank Defendants, alleging that their coordinated, below-market interest rate bids constituted per se unlawful price-fixing in the Settlement Deposit Market. The complaint argues that there is no legitimate pro-competitive justification for the arrangement.

Class definitions and relief. Plaintiffs propose three overlapping class definitions. The broadest encompasses all U.S. persons who were members of a settlement class in which the Administrator Defendants provided administration services, the Bank Defendants distributed QSF funds, and whose distributions were reduced by undisclosed remuneration to the administrators. A second class is limited to residents of New Jersey, New York, Florida, and California. A third class focuses specifically on class members whose distributions were reduced because the Bank Defendants paid below-market interest on QSF deposits.

The complaint seeks injunctive relief barring defendants from continuing to solicit or receive kickbacks, an accounting, actual and compensatory damages, treble damages under the Sherman Act and RICO, disgorgement and restitution, punitive damages, attorneys' fees, and pre- and post-judgment interest. The case has been identified as related to In re Class Action Settlement Administration Litigation, an MDL proceeding consolidated in the U.S. District Court for the District of Columbia, No. 1:25-mc-00179-JDB, MDL No. 3162.

The named plaintiffs. The four named plaintiffs (Donald Coughlan of New Jersey, Marissa Porter of Florida, Sandeep Trisal of New York, and Alan Starzinski of California) each allege they were class members in one or more of the settlements at issue, received disbursements from those settlements, and were unaware that the defendants were siphoning undisclosed payments from the settlement funds. Among the cases in which they participated are the Capital One data breach settlement, the Yahoo data breach settlement, the TikTok consumer privacy litigation settlement, and settlements arising from alleged violations involving Zoom Video Communications, Tinder, Peacock TV, and Apple, among others.

The Case is No. 2:26-cv-02113-BRM-CF.

Judge: Martinotti, B.

Attorneys: David S. Stone (Stone & Magnanini LLP) for Donald Coughlan.

Companies: Angeion Group LLC

News: Antitrust NewJerseyNews