Tag Archives: Employer Securities

Supreme Court Reiterates High Pleading Bar for Stock Drop Cases

As noted in our earlier blog post, the U.S. Supreme Court’s 2014 decision Fifth Third Bancorp v. Dudenhoeffer made clear that participants bringing stock-drop cases are subject to heightened pleading standards to help “divide the plausible sheep from the meritless goats.” In its first substantive ruling in a post-Dudenhoeffer stock-drop case, the U.S. Supreme Court … Continue Reading

Stock-Drop Decision Helpful to ESOP Fiduciaries

Yesterday, the Supreme Court issued its much anticipated decision in the stock-drop case, Fifth Third Bancorp v. Dudenhoeffer.  The Court vacated the lower court decision that was adverse to the employer, Fifth Third Bancorp, and remanded the case to the lower courts for further proceedings. Fiduciaries of employee stock ownership plans (ESOPs) had hoped that … Continue Reading

When Does a Plan Document “Encourage” an Employer Stock Fund Enough to Justify the Presumption of Prudence?

Many appellate courts have ruled that fiduciaries who allow plan investment in employer stock are entitled to deferential judicial review or a “presumption of prudence” when the plan document requires or encourages the offering of employer stock as an investment option.  But a new Second Circuit decision demonstrates that references to an employer stock fund … Continue Reading
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