Compliance November 3, 2008

Court Allows Comcast Company Stock Suit to Move Forward

The U.S. District Court for the Eastern District of Pennsylvania has moved forward several fiduciary breach claims against Comcast Corporation for its handling of company stock retirement plan investments.
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The court rejected Comcast’s assertion that a previous ruling in a case against Avaya Inc. extended protection for fiduciaries who decided to offer Comcast stock as an investment option because the plan is an eligible individual account plan (EIAP). In its opinion, the court pointed out that the Avaya plan mandated that company stock be offered as an investment option (see Court Finds Employees Missed ERISA Fiduciary Breach Case), entitling Avaya fiduciaries to a presumption that it was prudent to offer company stock, whereas the Comcast plan only said company stock “may” be offered to participants.

However, the court dismissed plaintiff Robert Urban’s claim alleging a breach of the fiduciaries’ duty to “provide complete and accurate information,” citing the 3rd U.S. Circuit Court of Appeals finding in Avaya “[t]hat defendants did not inform Plan participants about several adverse corporate developments prior to Avaya’s earnings announcement, [did] not constitute a breach of their disclosure obligations under ERISA.” (see Bad Corporate News Not Dire Enough to Dump Company Stock)

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Finally, the district court moved forward Urban’s claim that Comcast breached its fiduciary duty to monitor other plan fiduciaries, finding Urban stated a claim upon which relief could be granted.

The case was brought on behalf of all those who were participants in or beneficiaries of the the Comcast Corporation Retirement-Investment Plan at any time between February 1, 2007, and the present. According to the opinion, during this time the plan’s fiduciaries painted a bullish picture for the future of the company to participants and the public even while the company was failing to reach sales goals; top company executives were selling their company stock holdings; and the company’s stock price was falling.

The opinion in Urban v. Comcast Corporation is here.

IMHO November 1, 2008

IMHO: Ballot 'Initiative'

For all the talk of “hope″ and “change,″ this extended election cycle has offered little of either, IMHO.
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Now, I realize that there are those among you who are highly enamored of one candidate or the other – or at least highly un-enamored of the other. But, IMHO, if you don’t have some concerns about how both of the candidates would conduct themselves in office on at least some issues, you haven’t been paying attention.

Nonetheless, our nation’s tried and tested method of screening and selecting representatives has, with all its flaws, done its job.

Now it’s our turn.

Come Tuesday, we have a real choice to make. And this one – more than most, perhaps more than any in my lifetime – feels like a “game changer.’

As individual voters, it may not feel like we can have much impact, particularly if your state reliably goes “blue’ or “red’ (whether you do or not). However, the reality is that our votes do make a difference – if not in the result, then at least in the margin of the result; not just in terms of who sits in the Oval Office, but the tenor of voices on Capitol Hill, the influences in state legislatures, the composition of that local school board….

These are the people who will set in motion policies and practices that can have an impact that can, for good or ill, be felt far beyond their terms of office.

You owe it to yourself, to those you love, to those who have fought and died to preserve your right – your privilege – your responsibility – to vote.

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