Compliance January 28, 2010

Neuberger Berman Settles in Revenue Sharing Case

A federal court judge has given preliminary approval to a partial settlement in a lawsuit accusing Hartford Life Insurance Co. and Neuberger Berman Management of entering into revenue sharing agreements.
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An announcement on the Web site of law firm Shepherd, Finkelman, Miller & Shah, LLP, said the settlement is on behalf of all administrators of 401(k) plans, which engaged Hartford Life Insurance Company as a full-service provider and for which, at any time since November 14, 2003, Neuberger Berman has served as an investment adviser. The partial settlement provides for payment to a class of 575 administrators of $225,000, less any attorneys’ fees and costs approved by the court, according to the announcement.

The suit, filed in 2006, on behalf of Phones Plus Inc. against The Hartford Financial Services Group, Hartford Life Insurance Co., and Neuberger Berman Management alleges that the firms entered into revenue sharing agreements and arrangements with various mutual funds, and among themselves, in violation of the Employment Retirement Income Security Act (ERISA).

The law firm is in the process of identifying and notifying all class members.

More information is available here.

Compliance January 28, 2010

Law Firm Probes Potential Motorola Stock Drop Case

A Pennsylvania law firm has announced it is investigating potential claims against Motorola Inc. in regards to company stock in its 401(k) plan and employee stock purchase plan.
Reported by

The Law Offices of Howard G. Smith allege the company misrepresented sales prospects for its RAZR2 phones and that the release of inaccurate information caused a nearly 19% price drop in its shares.

A company news release said it is trying to find out whether Motorola violated the Employee Retirement Income Security Act (ERISA) by continuing to offer company stock as part of the Motorola 401(k) plan or its employee stock purchase plan of 1999 after it was no longer prudent to do so.

The firm claims that the share price decline took place in January 2008 after Motorola disclosed its problems with its RAZR2 sales and that the decline caused participants to lose money.

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