The Stember Feinstein Doyle & Payne law firm said Wednesday it is looking into whether there were violations of the Employee Retirement Income Security Act (ERISA) in the offering of company stock within the 401(k) plan. According to a press releases, the firm is investigating conduct that allegedly caused losses to the Morgan Keegan & Company Profit Sharing and Retirement Savings Plan. Morgan Keegan is a subsidiary of Regions Financial Corporation.
The release said the law firm is looking into whether plan fiduciaries knew or should have known that Regions and/or its subsidiary Morgan Keegan were not properly disclosing their large exposure to Collateralized Debt Obligations and subprime mortgages, which has caused losses to Regions’ common stock and Morgan Keegan’s mutual funds.
Specifically, the firm is investigating whether Morgan Keegan breached its fiduciary obligations:by continuing to offer Regions common stock and/or Morgan Keegan mutual funds as investment options for participant contributions when it was imprudent to do so; by not selling Regions stock and Morgan Keegan funds or otherwise protect the plan’s assets; and by making investments in Morgan Keegan and other mutual funds with large CDO/subprime mortgage exposure in various investment options of the plans.
The firm has already filed lawsuits in the U.S. District Court for the Western District of Tennessee against Regions Financial for participants of the Regions Financial and AmSouth 401(k) Plans, according to the press release.