Security Price Drop Not Enough For ERISA Breach: 2nd Circ.

Law360, New York (April 2, 2013, 7:56 PM EDT) -- The Second Circuit on Tuesday ruled that the decline in the market price of a security does not, by itself, establish a reasonable inference that it was imprudent to hold that security, upholding the dismissal of a suit accusing Morgan Stanley Investment Management Inc. of violating the Employee Retirement Income Security Act.

A three-judge panel held that absent well-pled factual allegations directly related to a fiduciary’s investment methods, a complaint alleging a breach of fiduciary duty under ERISA based solely on circumstantial factual allegations can only...
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