If a company you invested in committed securities fraud, you may assume the claim only applies to shares you held in a regular brokerage account. Many investors do. But if those same shares were held inside a retirement account — an IRA, a Roth IRA, a 401(k) — you likely still have the right to recover your losses. The type of account doesn’t determine whether fraud occurred or whether you were harmed by it. 

Here’s what you need to know. 

Can I File a Claim if My Losses Were in an IRA? 

If you held shares in an IRA — traditional, Roth, SEP, or SIMPLE — you are the investor of record. The account is yours, the investment decisions are yours, and the losses are yours. Federal securities law doesn’t carve out retirement accounts from fraud protection. 

Under the Private Securities Litigation Reform Act of 1995 (PSLRA), class members in a securities fraud suit include all investors who purchased shares during the relevant period — the law makes no distinction based on account type. If you bought shares through your IRA and lost money when the fraud was revealed, you are eligible to file a claim just like any other investor. 

When a securities class action is filed, class members typically include anyone who purchased shares during the relevant period, regardless of what kind of account they used.

The SEC’s investor.gov confirms that IRA account holders bear the same investment risk — and hold the same rights — as holders of standard brokerage accounts when it comes to the underlying securities. 

The practical steps are the same: you’ll need records of your purchases (dates and prices), records of your sales or the stock’s decline, and your account statements showing the loss. Your IRA custodian — Fidelity, Schwab, Vanguard, or whoever holds the account — can provide all of this. For more on how to know whether you have a qualifying loss, we’ve covered that in detail separately. 

Can I Recover 401(k) Losses From Securities Fraud? 

The 401(k) situation is different — but not necessarily worse. 

In a 401(k), you don’t directly own the shares. The plan itself holds the investment, and the plan’s trustee is the legal owner of record under ERISA (the Employee Retirement Income Security Act of 1974), the federal law that governs employer-sponsored retirement plans. This means that in a standard securities class action, the plan may be the proper claimant, not you individually. 

That said, there are two paths where 401(k) losses can be recoverable: 

The plan files a claim on your behalf.Large institutional plans — pension funds, public employee plans, large corporate 401(k)s — often monitor for securities fraud cases and file claims as class members or as lead plaintiffs. If your 401(k) invested in a company that was later found to have committed fraud, there’s a real chance your plan already filed or is eligible to file a claim. The recovery flows back to the plan and, through it, to participants like you. 

The company that defrauded you is your employer.If your 401(k) was heavily invested in your own company’s stock — as many are — and that company committed securities fraud, a separate legal theory applies: an ERISA breach of fiduciary duty claim. Plan fiduciaries have a duty to act in participants’ best interests under ERISA § 404. Allowing employees to continue investing in company stock while insiders knew the stock was artificially inflated by fraud can be a serious ERISA violation. The U.S. Supreme Court confirmed in LaRue v. DeWolff, Boberg & Associates, 552 U.S. 248 (2008) that individual 401(k) participants can bring suit to recover losses to their own accounts caused by a fiduciary breach — a significant ruling for workers in company stock-heavy plans. More recently, the Court’s decision in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014) clarified the standards for such claims. These cases have resulted in substantial recoveries for 401(k) participants at companies like Enron, WorldCom, and others. 

What Should I Do If I Think I Have a Claim? 

Whether your losses were in a brokerage account, an IRA, or a 401(k), the first step is the same: document what you held and when. 

Gather your account statements for the period when you owned the stock, and note the dates and prices of your purchases. If a class action has already been filed, a notice will typically be published — and there are strict deadlines to file a claim or seek a leadership role in the case. Missing that window can limit your recovery. 

You don’t need to be a large institutional investor to participate. As we’ve explained before, you don’t have to be a “big” investor to join a class action, and you don’t need to hire your own attorney to receive a share of any recovery. Securities fraud cases are handled on a contingency basis, meaning there is no cost to you. The type of account where you held the shares doesn’t change that. 

If you held shares in a company that has recently been named in a securities investigation or class action — through any kind of account — it’s worth finding out whether you’re eligible to participate. How settlements work and what you might recover are questions we’re happy to walk through with you directly. 

Frequently Asked Questions

What if my 401(k) plan already filed a claim without telling me?

This happens often with large institutional plans. Any recovery flows back to the plan and is typically distributed to participants according to plan rules — you may not need to file anything individually. Checking with your plan administrator is the fastest way to find out. 

Does it matter if my IRA is a Roth vs. traditional IRA?

No. Whether it’s a traditional, Roth, SEP, or SIMPLE IRA, you’re the investor of record either way. The tax treatment of the account doesn’t affect your standing to file a securities fraud claim.

Do I need to hire my own lawyer if I hold shares through Fidelity, Schwab, or Vanguard?

No. Securities class actions are handled on a contingency basis, so there’s no upfront cost, and you don’t need separate counsel to receive a share of any recovery — regardless of which custodian holds your account.

Is there a deadline to file a claim?

Yes. Once a class action is filed, a notice is published with a claims deadline. Missing that window can limit or eliminate your ability to recover.

Can I bring a claim if my employer’s stock in my 401(k) lost value due to fraud?

Yes, potentially through a separate legal theory: an ERISA breach of fiduciary duty claim, distinct from a standard securities class action. This applies when your own employer is the company accused of fraud.

Bronstein, Gewirtz & Grossman, LLC (BG&G) is a nationally recognized plaintiff’s law firm with nearly 30 years of experience representing investors and consumers in securities fraud and class action litigation. Ranked among the top securities class action firms in the country by ISS Securities Class Action Services, BG&G has recovered hundreds of millions of dollars for clients nationwide. The firm handles securities class action cases on a fully contingent basis.
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