With the determination letter program gone, Wagner Law Group is helping plan sponsors remain compliant with the IRS.
A court used plain language of the ESOP plan document to show the plan administrator's failure to implement participants diversification elections was "arbitrary and capricious."
The judge noted that stock must be purchased at an inflated price and sold at a loss for an economic injury to occur.
Research from the NCEO finds ESOPs still hold a significant amount of retirement plan assets.
A U.S. appellate court had to resolve a dispute about whose burden it was to prove or disprove a fiduciary breach before deciding on the case.
The proposed class action suit includes many of the classic claims typically leveled in ERISA stock-drop litigation.
Some ownership transitions are designed to wring every last dollar possible out of the business, but this is simply not what ESOPs are about.
In April, a federal judge found First Bankers Trust Services Inc. liable for causing an ESOP to overpay for shares of the company’s stock.
The legislation would reform the Securities and Exchange Commission (SEC) Rule 701, which imposes a slew of regulations on small businesses, especially newly formed start-ups.
A federal court held that First Bankers breached its fiduciary duties to the plan’s participants by failing to conduct a prudent investigation into the fair market value of the shares.
The plaintiffs did not meet pleading standards set forth in Fifth Third v. Dudenhoeffer, according to a district court opinion.
The firm has been deemed liable for violations stemming from a “rushed” ESOP valuation—although some claims of wrongdoing leveled against the firm at trial were denied.
Among other things, the plaintiff alleges the plan committee ignored the numerous warning signs that Chesapeake was an imprudent investment for retirement assets, and allowed the plan to invest more than 44% of its assets in this one stock.
For claims alleging a fiduciary breach based on non-public information, the high court has held that plaintiffs must plausibly allege an alternative action fiduciaries could have taken and would not have viewed as more harmful to the plan than helpful.
The underlying stock drop litigation had already seen multiple rulings from a New York district court and the 2nd Circuit.
According to both district and appellate court rulings, the ESOP fiduciaries knowingly offered the employer stock at an inflated price.
This is the question in a petition before the Supreme Court in a case involving a leveraged buyout of an ESOP.
The U.S. Department of Labor is suing the fiduciaries of a Vermont employee stock ownership plan for violations of the Employee Retirement Income Security Act.
To appreciate the riskiness of a stock intimately involves its market valuation, and to argue that the ESOP fiduciaries should have been able to outguess the market’s valuation is inherently unfair absent special circumstance, such as fraud.
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