Northern Trust Lawsuit 2026, $35M Elder Fraud Case Plus $6.9M 401(k) Settlement Details and Deadlines
Is there a Northern Trust lawsuit in 2026? Yes—two major cases. A new $35 million elder fraud lawsuit filed January 2026 in Florida federal court alleges a Northern Trust VP embezzled from an elderly client’s trust for over a decade. Separately, Northern Trust’s $6.9 million 401(k) settlement for underperforming target-date funds received court approval on January 28, 2026, with payments expected soon for eligible participants.
Here’s what you need to know about both lawsuits.
$35 Million Elder Fraud Lawsuit: What Happened
Elizabeth Madden vs. Northern Trust
Elizabeth Madden, a woman in her eighties, sued The Northern Trust Company on January 28, 2026, in the United States District Court for the Southern District of Florida, alleging the bank enabled systematic theft from her $20 million legacy trust.
The lawsuit centers on Christopher Walters, a former Vice President and Senior Fiduciary Relationship Advisor at Northern Trust. According to court filings, Walters allegedly diverted trust assets to fund his failed gym business, pay rent, cover personal credit card debts, and finance his lifestyle over more than a decade.
Northern Trust Collected $1M in Fees While Theft Continued
During the alleged embezzlement, Northern Trust collected over $1 million in fees for administering Madden’s account. The fraud was only discovered after Madden moved her trust to another financial institution in 2025.
In August 2025, Northern Trust itself sued Walters, accusing him of “blatant fraud.” Madden’s lawsuit, however, alleges Northern Trust bears responsibility for failing to detect and prevent the theft despite its fiduciary obligations.
The Cover-Up Allegations
After the fraud surfaced, Northern Trust’s legal team allegedly drafted a statement in Madden’s voice designed to place all blame on Walters and absolve Northern Trust of liability. Executives reportedly planned to fly to her home on Good Friday 2025 to persuade her to sign it.
The lawsuit asserts ten counts including civil exploitation of a vulnerable adult, fraud, breach of fiduciary duty, negligent supervision, negligence, and violations of the Computer Fraud and Abuse Act. Madden seeks compensatory and punitive damages totaling $35 million, plus attorney fees.
$6.9M 401(k) Settlement: Who Qualifies and How to Claim
Eligibility for Northern Trust Employees
If you participated in The Northern Trust Thrift Incentive Plan and invested in Northern Trust Focus Funds anytime between June 1, 2015, and January 28, 2026, you’re part of the settlement class.
The case (Conlon et al. v. The Northern Trust Co. et al., Case No. 1:21-cv-02940, Northern District of Illinois) alleged Northern Trust breached ERISA fiduciary duties by retaining underperforming proprietary target-date funds that cost participants millions in lost retirement savings.
Settlement Amount and Distribution
The $6.9 million settlement will be distributed after deductions for:
- Legal fees (up to $2.3 million)
- Administrative expenses (up to $800,000)
- Plaintiff service awards ($7,500 each for six named plaintiffs)
The remaining Net Settlement Amount will be allocated to approximately 14,000 class members based on their losses from investing in the Northern Trust Focus Funds.
No Claim Form Required
Good news: Most class members don’t need to do anything. Payments will be made automatically according to the Court-approved Plan of Allocation.
Current participants: Payments will be deposited directly into your existing Northern Trust plan account.
Former participants: You’ll receive payment by check unless you request a rollover to a qualified retirement account.
Important Deadlines for the 401(k) Settlement
July 15, 2026: Rollover Election Deadline
Former participants who want their settlement payment rolled over to a qualified retirement account (instead of receiving a check) must complete and mail the Former Participant Rollover Form by July 15, 2026.
Obtain the form by:
- Calling 1-844-525-9073
- Visiting https://northerntrusterisa.com
- Submitting your election online at the settlement website
July 1, 2026: Objection Deadline
If you object to any part of the settlement, you must notify the Court and counsel in writing by July 1, 2026. You may also appear at the final approval hearing, expected in August 2026, but you must notify the parties of your intent to appear by the July 1 deadline.
Final Approval Hearing
The Court will hold a final fairness hearing to determine whether to approve the settlement. Check the settlement website at https://northerntrusterisa.com for the exact date and time.
Similar to the Celgene $239 Million Securities Class Action Lawsuit Settlement, Investors Can File Claims Until April 13, 2026, this ERISA settlement provides automatic relief to affected participants.
What the 401(k) Lawsuit Alleged
Underperforming Focus Funds
Plaintiffs alleged the Northern Trust Focus Funds—the only target-date fund option in the plan—consistently underperformed 70% to 90% of peer funds for nearly a decade. The Focus Funds were also the plan’s default investment option for participants who didn’t make active investment choices.
According to Morningstar analysis cited in the complaint, the Focus Funds lagged both the Dow Jones US Target Date Index and S&P Target Date Index throughout the class period.
Estimated $34 Million in Lost Retirement Savings
The lawsuit estimated participants lost up to $34 million in retirement savings since 2014 because Northern Trust retained the underperforming proprietary funds instead of replacing them with better alternatives.
The U.S. District Court for the Northern District of Illinois denied Northern Trust’s motion to dismiss in August 2022, finding plaintiffs had adequately alleged the plan committee failed to seek the best investment options or negotiate the lowest fees—both potential breaches of ERISA fiduciary duties.
Northern Trust’s Response
Northern Trust stated it responded “swiftly and appropriately” when it discovered the alleged elder fraud transactions. Regarding the 401(k) settlement, Northern Trust denies all allegations of wrongdoing and maintains the settlement is not an admission of liability.
The company emphasizes the settlement avoids the cost and uncertainty of continued litigation while providing a fair resolution for plan participants.
Frequently Asked Questions
Can I file a claim in the elder fraud lawsuit?
No. This is an individual lawsuit filed by Elizabeth Madden. It is not a class action open to other Northern Trust clients—yet. If you believe you experienced similar misconduct, consult an attorney about your individual legal rights.
Do I need to do anything to receive my 401(k) settlement payment?
Most participants do not. Payments will be made automatically. Former participants only need to act if they want a rollover instead of a check (deadline July 15, 2026).
When will I receive my 401(k) settlement payment?
Payments will be distributed after the Court grants final approval (expected mid-2026) and any appeals are resolved.
How much will I receive from the Northern Trust 401(k) settlement?
Individual payment amounts depend on your losses from investing in the Northern Trust Focus Funds during the class period. The settlement administrator will calculate payments based on the Court-approved Plan of Allocation.
Does the settlement affect current Northern Trust employees?
Yes, if you participated in the Thrift Incentive Plan and invested in Focus Funds between June 1, 2015, and January 28, 2026. Your employment status doesn’t affect eligibility.
Can I opt out of the 401(k) settlement?
The settlement documents don’t provide a standard opt-out mechanism, but you may object to the settlement terms by the July 1, 2026 deadline.
Is the elder fraud case a class action?
Not currently. It’s an individual lawsuit, though other clients alleging similar harm could potentially file separate cases or seek class certification.
Last Updated: February 4, 2026
Disclaimer: This article provides informational content only and does not constitute legal advice.
Northern Trust 401(k) participants: Your settlement payment is coming—no action required unless you want a rollover (deadline July 15, 2026).
Stay informed, stay protected. — AllAboutLawyer.com
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.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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