Northern Trust Lawsuit 2026, $35M Elder Fraud Case + $6.9M 401(k) Settlement—What Affected Clients & Plan Members Need To Know
Northern Trust faces two major lawsuits in February 2026: an $35 million elder fraud case alleging a vice president embezzled from an 81-year-old client’s trust for over a decade, and a $6.9 million ERISA settlement over underperforming in-house target date funds in its 401(k) plan, which received preliminary court approval on January 28, 2025.
The $35 Million Elder Fraud Lawsuit: What Happened?
Elizabeth Madden, 81, sued Northern Trust in U.S. District Court for the Southern District of Florida on January 28, 2026, claiming vice president Christopher Walters systematically stole from her $20 million legacy trust to fund his failed gym investment and pay personal credit card debts.
Madden’s grandfather founded Security Trust Co., which Northern Trust acquired in 1971. Walters served as her Senior Fiduciary Relationship Advisor while allegedly diverting trust assets for over 10 years—while Northern Trust collected over $1 million in fees.
Northern Trust offered Madden $6 million in restitution without negotiation, saying they offered “the full amount of stolen funds plus lost opportunity costs”. However, her attorney rejected the offer, seeking the full $35 million.
Northern Trust’s Response: “We Acted Swiftly”
Northern Trust stated: “When we learned that a former employee engaged in fraudulent transactions, we responded swiftly and appropriately—reporting the matter to authorities, cooperating fully with their investigation, and retaining a prominent law firm and forensic accounting firm”.
In August 2025, Northern Trust sued Christopher Walters separately, accusing him of “blatant fraud”. Walters was fired in 2024.
A second client, Ludwig, also sued over similar allegations. Northern Trust offered Ludwig $143,000 in restitution. Both cases remain active.
The $6.9M 401(k) Settlement: ERISA Claims Over Underperforming Funds
Separately, Northern Trust agreed to pay $6.9 million to settle a class action alleging it breached fiduciary duties by retaining underperforming Northern Trust Focus Funds in its employee retirement plan.
The lawsuit, filed in June 2021, claimed the 11 Northern Trust Focus Funds underperformed 70-90% of peer target-date funds for nearly a decade while charging excessive fees.
Who Qualifies For The $6.9M Settlement?
If you participated in The Northern Trust Thrift Incentive Plan and invested in Northern Trust Focus Funds at any time between June 1, 2015 and January 28, 2025, you are automatically part of the settlement class.
The settlement covers approximately 14,170 participants in the $2.9 billion plan.
How To Claim: No Action Required For Current Participants
If the $6.9 million settlement is approved by the court, class members will NOT need to do anything to receive a Northern Trust settlement rebate.
Current Participants with plan accounts as of January 28, 2025 will receive payments directly into their existing Northern Trust accounts. Former Participants will receive checks or can elect a rollover to a qualified retirement account.
CRITICAL DEADLINE: Former Participants who want a rollover instead of a check must submit a Former Participant Rollover Form by July 15, 2025.
Official Settlement Website & Contact Information
Official Website: northerntrusterisa.com
Phone: 1-844-525-9073
Objection Deadline: July 1, 2025
Final Approval Hearing: August 2025 (date TBD)
How Much Money Will I Receive?
Individual payment amounts will be determined on a pro rata basis based on your average qualifying account balance between June 1, 2015 and September 22, 2021.
After deducting court-approved attorney fees (up to $2.3 million) and administrative costs ($800,000), the Net Settlement Amount will be distributed among class members.
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FAQs About Northern Trust Lawsuits
Is the $35 million elder fraud lawsuit a settlement?
No. Madden’s case was filed January 28, 2026 and remains active. Her attorneys requested an expedited trial date of August 3, 2026 due to her advanced age and health concerns.
Do I need to file a claim for the 401(k) settlement?
No. Class members are not required to submit a claim to receive a settlement payment—payments are automatic if you qualify.
Can I opt out of the ERISA settlement?
Yes, but the deadline has passed. You’re now bound by the settlement terms.
What if I transferred my 401(k) out of Northern Trust?
You still qualify if you were invested in Northern Trust Focus Funds between June 1, 2015 and January 28, 2025.
How can I track my elder fraud case?
Monitor federal court dockets at PACER.gov for case updates in U.S. District Court for the Southern District of Florida.
Related cases like the 23andMe $50M class action settlement and Cash App security settlement show financial institutions face serious accountability for protecting client assets.
Last Updated: January 30, 2026
Disclaimer: This article provides information about Northern Trust lawsuits and settlements. It is not legal advice.
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About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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