IBM agrees to $4.8 million settlement in protracted ERISA case
Stock-drop lawsuit made 2 stops at U.S. Supreme Court before pact was reached
Bloomberg
A monitor displays International Business Machines Corp. (IBM) signage on the floor of the New York Stock Exchange.
IBM agreed to pay $4.75 million to settle a long-running ERISA stock-drop complaint by participants in a company 401(k) plan.
The preliminary agreement for the class-action suit, which must be approved by U.S. District Judge William H. Pauley III in New York, was filed April 2 with the court by plaintiffs attorneys.
The parties said Feb. 25 that they had reached a tentative agreement but provided no terms.
Below are high-level takeaways on each topic.
Securities Filings Remain Elevated Despite the Pandemic
Despite unprecedented disruptions to the court system from the COVID-19 pandemic, plaintiffs continued to bring securities class actions at elevated levels in 2020 a sign that filings will remain high in the year ahead. Based on data from Cornerstone Research through September 30, 2020, plaintiffs were on pace to file approximately 375 federal and state securities class actions through the end of the year. Although lower than the more than 400 actions filed in each of the previous three years, this figure substantially exceeds the 261 cases brought, on average, between 2010 and 2019.
Compliance Duties and Litigation Risks in 2021
Attorneys review what regulations plan sponsors must adhere to and legal decisions to keep in mind for the new year.
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Looking ahead after the start of the new year, partners at Groom Law Group and the Wagner Law Group weighed in on new Department of Labor (DOL) rules and potential litigation that plan sponsors should be aware of.
The first DOL rule that sponsors should understand concerns new regulatory standards for fiduciary considerations of environmental, social and governance (ESG) investments, says Ivelisse Berio LeBeau, a partner with the Wagner Law Group. Berio LeBeau says ESG investing is likely to become more prevalent in retirement plans, as “more than 8,700 comments were submitted, the vast majority critical of the proposed regulation.
Supreme Court Appeal Filed in Wells Fargo Stock-Drop Case
The appeal asks whether an earlier Supreme Court ruling means ESOP fiduciaries are effectively immune from duty-of-prudence liability for the failure to publicly disclose potentially damaging inside information.
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The plaintiffs in a long-running Employee Retirement Income Security Act (ERISA) lawsuit filed against various Wells Fargo defendants have petitioned the U.S. Supreme Court to review an unfavorable ruling handed down by the 8th U.S. Circuit Court of Appeals in July.
The 8th Circuit ruling at issue affirmed a lower court ruling out of the U.S. District Court for the District of Minnesota, which sided firmly with the Wells Fargo defendants based on precedent set by the 2014 Supreme Court ruling known as