A court decision from the U.S. District Court of Minnesota tells us, "Defendants U.S. Bancorp and U.S. Bancorp Investments, Inc., provide a bank-deposit (or 'cash-sweep') program for investment-account customers. Under the program, uninvested cash balances in participating customers' accounts are periodically transferred (or swept) into interest-bearing deposit accounts, and customers are paid interest. Plaintiffs Adam Saul Futo and James Bartley Ellis are two investment-account customers who participated in Defendants' cash-sweep program. In this would-be class action, Mr. Futo and Mr. Ellis allege that Defendants paid them and all other participating customers unreasonably low, below-market interest rates. Plaintiffs invoke subject-matter jurisdiction under CAFA and assert several claims arising under state law." (Note: Register soon for our upcoming Bond Fund Symposium, which is March 19-20 in Boston. We hope to see you later next month!)
The decision continues, "Defendants seek dismissal under Federal Rule of Civil Procedure 12(b)(6). The motion will be granted. To summarize, Minnesota's independent-duty rule bars Plaintiffs' negligence claim. Plaintiffs do not allege facts plausibly showing a fiduciary relationship; if they did, they do not allege facts plausibly showing a fiduciary duty was breached. Nor do Plaintiffs plausibly allege that the implied covenant of good faith and fair dealing was breached. Plaintiffs' misrepresentation and fraud claims -- whether they are common-law or statutory claims -- fail for overlapping reasons."
It says, "The primary dismissal-prompting problem is that Defendants fully disclosed the program's interest-payment arrangement and did not commit to paying a 'reasonable' or minimum interest rate. The unjust-enrichment claim fails because a contract covers the complained-of behavior and Plaintiffs have not plausibly alleged the contract might be unenforceable. For legal and practical reasons, Plaintiffs will not be given an opportunity to amend, and the operative Amended Complaint will be dismissed with prejudice."
For more on brokerage sweep lawsuits, see these Crane Data News stories: "Crane 100 Money Fund Index Up to 3.58%; FINRA Fines APFS on Sweeps" (1/6/26), "BNY to Manage OpenEden Tokenized $TBILL Fund; Schwab Sweeps Sued" (8/18/25), "Weekly Money Fund Portfolio Holdings; Barron's: SEC Done w/MS Sweeps" (5/21/25), "MMF Assets Plunge on Tax Outflows; ignites on Brokerage Sweep Suits" (4/21/25), "Weekly Portfolio Holdings; Inv News on Pershing Cash Grab; Osaic Suit" (2/20/25), "MMF Assets Plunge on Tax Outflows; ignites on Brokerage Sweep Suits" (4/21/25), "WSJ: SEC, Brokerage Sweeps Settle" (1/21/25), "Schwab Latest Firm Sued Over Sweeps; BlackRock's Small: MMFs Stickier" (12/12/24), "Wells Quiet on Sweeps on Q3 Call" (10/18/24), "Barron's Writes on Brokerage Sweep Woes; Reuters on Rate Cuts, MMFs" (9/23/24), "Alight Money Fund Liquidates; Bloomberg Law on Brokerage Sweep Suits" (9/19/24), "Sept. MFI: Sticking with Prime Inst; MMFs Hit Record; Sweeps Scrutiny" (9/9/24), "Barron's: JPMorgan Sued on Sweeps" (8/29/24), "More on SEC Sweeps Scrutiny; Inv News on Sweeps, UBS's Earnings Call" (8/20/24), "Law Firm Says Bolster Disclosures, Rates on Sweeps; Crane Index 5.11%" (8/13/24), "Barron's: BofA Cites Risk from Sweeps" (8/8/24), "Central Bank of Ireland on Fund Regulations; Brokerage Sweeps Lawsuits" (8/5/24), "Tradeweb Completes ICD Acquisition; AdvisorHub on Wells Sweep Suit" (8/2/24) and "IN: Ameriprise Sued Over Sweeps" (7/31/24).
In other news, Risk.net writes, "MMF investments hit new high after $1trn gained over 2025." They explain, "Money market funds (MMFs) scooped a record $8.31 trillion of investments at the end of last year, capping off a year in which overall holdings grew by more than $1 trillion for only the second time. The total rose 3% in December and 14.5% year on year. Among the assets held by MMFs, US Treasuries were the most common at $3.52 trillion, up 17.5% over the year and a record high."
They write, "Reverse repos climbed 14.3% to $2.99 trillion in 2025, a similar rate of growth to federal agency and government-sponsored enterprise securities, which ended the year on $1.01 trillion -- the first 13-figure amount since April 2020. Bank-related assets were the only asset type to shrink year-on year, by 2.7% to $451.8 billion. Other assets -- a residual category including municipal securities, commercial paper, asset-backed securities and uncategorised assets -- grew 14.2% to $328.3 billion."
The piece explains, "The Office of Financial Research publishes monthly MMF portfolio data based on Form N-MFP filings with the Securities and Exchange Commission by the funds. These reports provide detailed breakdowns by counterparty type, tenor and collateral. MMF repo exposures are categorised by whether they are placed with the Fed's ON RRP facility, netted or cleared via FICC, or conducted with other counterparties -- primarily financial institutions -- further split into US- or foreign-parented entities."
It tells us, "Since 2017, MMFs have been able to access FICC's clearing platforms under a 'sponsorship' model via dealer-members for the delivery-versus-payment service, and since 2021 for the general collateral financing service. December's figures are the latest in a prolonged period of steep growth for MMF investments. In the first decade of data, yearly growth only topped 10% twice, one instance of which was the pandemic-stricken 2020. By contrast, the last three years have seen increases of 22.8%, 13.3% and now 14.5%. In absolute terms, the $3.09 trillion growth in those three years exceeds the $2.17 trillion added over the previous 12."
Finally, the article comments, "This growth could stem from multiple sources. Prolonged high interest rates have made MMFs attractive as investments given their low risk combined with relatively healthy reward. Macro concerns have also enhanced the appeal of short-term debt instruments over long-term ones, supporting appetite for MMFs. Furthermore, the funds act as a safe haven, as seen in the Covid-19 pandemic, so the geopolitical instability of 2025 that has seen gold and silver hit record highs could also have driven investment flows to MMFs. One notable trend in the last six months has been the surge in US Treasuries, which have risen by $903.8 billion since June. Whether this appetite continues could have implications for 2026, for which public debt was one of investors' top 10 concerns."
