News Notes: Bank Agrees To Pay $26 Million For Poor 401(K) Investments

First Union Corp. has agreed to pay a whopping $26 million to current and former employees to settle two lawsuits accusing the bank of forcing workers to invest their 401(k) retirement savings in poorly performing mutual funds. The employees charged that First Union included second-rate investment funds in its in-house 401(k) plan and then used employee contributions as seed money to grow new funds sold to outside investors. The workers also claimed that the bank charged them excessive fees while waiving or reducing fees charged to outside investors. First Union did not admit any wrongdoing but said it settled to avoid protracted litigation.