A proposed class-action lawsuit was filed against Wells Fargo accusing the bank of "self-dealing and imprudent investing" by steering more than $3 billion of 401(k) contributions into expensive, underperforming proprietary mutual funds to enrich itself. The complaint specifically names the Wells Fargo Dow Jones Target Date funds.

Target date funds, also known as lifecycle funds, blend mutual funds that invest in stocks, bonds and cash, shifting the mix based on investors' expected retirement dates.

The lawsuit, filed by employees led by John Meiners, from St. Louis, seeks to recoup excess fees and unrealized profits stemming from Wells Fargo's alleged breach of fiduciary duties to all 401(k) participants over the last 6 years. Meiners said employees could have earned $323 million more in returns in the 5 years ended 630/16 had Vanguard target date funds been used.

The Wells Fargo's target date funds are alleged to cost 2.5 times more than similar funds from such rivals as Fidelity Investments and Vanguard Group – the difference being the layering of an extra set of fees to run the funds, on top of fees to manage the underlying indexed funds.

Wells Fargo's 401(k) plan has about $35 billion in assets and more than 350,000 participants, the complaint said.