Avoiding ERISA Stock Drop Actions

Law360, New York (April 1, 2009, 12:00 AM EDT) -- In light of the steep decline in virtually all sectors of the equity markets and the general financial uncertainty accompanying the current recession, retirement plan fiduciaries with responsibility over plan investments in employer stock are reminded to take affirmative steps to monitor and evaluate the prudence of the employer stock investments.

ERISA suits for fiduciary breach in “stock drop” cases have become commonplace. The general downturn in the equity market makes these suits even more likely by almost universally providing the “drop” need for the fact...
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