National City Settles ERISA Suit for $43M

A settlement has been preliminarily approved in a consolidated class action lawsuit against National City Corporation.

The settlement was announced by law firms Stull, Stull & Brody and Barroway Topaz Kessler Meltzer & Check, LLP.  The payment of $43 million will be distributed between current and former participants and beneficiaries of the National City Savings and Investment Plan. 

Participants qualify to receive part of the settlement if they had money invested in National City common stock or fund units in the National City Stock Fund at any time during the period September 5, 2006, to December 31, 2008.  Or if they held mutual funds of Allegiant Asset Management Company in their plan accounts at any time from March 25, 2002, to December 31, 2009.  

According to the announcement, the suit claimed that the defendants breached their fiduciary duties under ERISA by allowing the investment of the plan’s assets in National City stock or fund units during a time when they knew or should have known that such investment was imprudent. There were also claims that defendants breached their fiduciary duties by allowing the plan to invest in Allegiant Funds in violation of ERISA. 

All defendants deny any wrongdoing.