When money is lost in the order of billions, someone is getting sued.

It's quite sad that the pillar of American life that is the 401k is given to shady fund managers. The law should be that if you manage a 401k you must be a fiduciary. If that were the case then no one would be bag holding these fake valuations because they'd be liable for negligence. Right now they're just in on the scam.

Regular people want to invest so they can make money and companies want people to invest so that they can raise money. So pretty much everybody wants the 401k money to be invested in the stock market.

But the issue is that investing in the stock market is very technical, so some smart asses invented the index funds to make it easy for daddy and mummy to put their retirement accounts to work.

The index has safeguards in place to try and reduce its volatilty. So people are happy, cause they are investing in stock without having to look closely at what it is they bought.

But if suddenly some people change the safeguard rule, so that their buddy can dump their overvalued stock over people who think they are investing relatively safely, then it can be argued that there is foul play.

People are not finance specialists and they are heavily incentivized to buy index funds, so they need to trust that the people who are telling them to invest are not hiding things from them. If that trust is broken, lawsuits will follow.

It’s like: imagine you own a Toyota and have a maintenance contract with Toyota, and one day you have your car serviced and they tell you they changed the brakes. They tell you the brand of the new brakes and they tell you it’s fine while in fact, they put some cheap garbage that fail after 100 km of driving.

When the brakes fail and your car falls off a cliff, you go and see them and they tell you: “yeah those brakes were bad, but we told you we put them in, you could have looked up that these were bad, it’s all over the internet, so that’s on you”.