• Invest in a Vanguard target date fund?
  • Through a Vanguard brokerage account?

IF SO, you may have received an enormous capital gains tax bill because of how Vanguard managed your investment. Our law firm can help recover your loss.

In 2021, Vanguard allegedly made changes to its Target Date Funds to help some of their biggest and wealthiest investors pay less. As a result of these changes, many ordinary retail investors were surprised with an enormous capital gains tax bill, according to news reports.

Many people are filing lawsuits against Vanguard. Don’t miss your chance to recover what was lost.

Invest in Vanguard’s Target Retirement Date Fund through a Vanguard brokerage account?

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Why are my Vanguard Target Date Funds capital gains taxes so high?

“A change that benefited big clients left little ones holding the bag” -Wall Street Journal

As reported in the Wall Street Journal “At the end of 2020, Vanguard reduced the minimum investment in its institutional Target Retirement funds to $5 million from $100 million. That set off an elephant stampede, as multimillion-dollar corporate retirement plans got out of the standard target funds and into the institutional equivalents.”

Vanguard made this change to reduce fees for its big clients but doing so forced a selloff of the Target Retirement Fund’s assets, according to media reports. This left smaller investors who owned shares of the Target Retirement Fund in a taxable brokerage account owing huge capital-gains taxes.

Although the Target Retirement Fund’s may have been intended for retirement accounts which are taxed differently, according to the Wall Street Journal, “nowhere on the funds’ main pages at Vanguard.com does the firm tell investors that the funds aren’t ideal for taxable accounts.” This failure to adequately warn people may have misled many to think that Target Retirement Funds were suitable investment vehicles for brokerage accounts.

What is the Vanguard Target Date Fund Lawsuit About?

A 2022 Lawsuit alleges that Vanguard violated its legal duties to investors, costing investors across the nation “hundreds of millions of dollars in damages.” The Lawsuit claims that “Vanguard had other, readily-available ways to lower costs for retirement plans without hurting its taxable investors. But it either did not even consider these options, or did not care about hurting its smaller, taxable investors.

In short, according to the lawsuit, Vanguard is being sued because the company treated its everyday retail investors in ways that were either “grossly negligent, reckless, or in bad faith.”

Did I pay too much in capital gains taxes for Vanguard Target Date Funds?

If you have read the recent news reports about lawsuits against Vanguard, you may be asking yourself, “Did I pay too much in capital gains taxes?”

Here is a good 3-part test that will help you figure out if you paid too much.

  1. Do I own shares in a Vanguard Target Date Fund?
  2. Are these shares in a Vanguard Brokerage Account? (Not a retirement account like a 401k or an IRA)
  3. Are the capital gains distributions on my Vanguard 1099 form higher in 2021 than they were in 2020? (You can find this information on Schedule D, Line 13 of your 1099 form that Vanguard sends you)

If you answered yes to all three, you may have a claim. Contact our attorneys for a consultation.

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“My in-laws lost their retirement funds to a dishonest broker. Silver Law Group and Scott Silver aggressively pursued their losses until he got their money back.”

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Our team typically handles securities and investment-related legal claims on a contingency or “success-fee” basis. This means that you will not have to pay an hourly rate or pay out-of-pocket in advance for legal representation. If you win, the lawyer’s fee will come out of the money awarded to you. But if no money is recovered from your claim, you will owe nothing to our team for attorneys’ fees or the work done on the case.

We are happy to discuss any questions related to our fees as well as different financial arrangements we can structure.

Our Securities Arbitration Team

Scott Silver

Scott focuses his law practice on securities arbitration and litigation and plaintiff-side class action litigation, representing individual investors and institutions in claims against brokerage firms, investment advisors, commodities firms, hedge funds and others.

Michael Schrag

Michael has over 20 years of experience representing individual and small business plaintiffs against the world’s large financial institutions, including Visa, Mastercard, and Chase.

Eileen Epstein Carney

Eileen is involved in the firm’s securities practice and has over a decade of experience in the legal world. She received her law degree from American University in 2005.

David Stein

David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.