WaMu to Settle Stock Drop Suits for $49M

A federal court has given preliminary approval of a settlement that would resolve lawsuits alleging breaches of fiduciary duties under the Employee Retirement Income Security Act by Washington Mutual.

A news release from law firm Keller Rohrback said the proposed settlement provides for a payment of $49 million, minus expenses including court-approved attorneys’ fees and expenses and service awards to the plaintiffs who brought the lawsuit, taxes and other costs, to be allocated to class members whose 401(k) accounts suffered losses as a result of investing in Washington Mutual common stock.   

The 401(k) suits revolve around allegations the company offered a company stock investment in its plan after it was no longer prudent to do so.  U.S. District Judge Marsha J. Pechman of the U.S. District Court for the Western District of Washington was to decide on initial motions to dismiss the cases in mid-September (see September Ruling Expected in WaMu 401(k) Cases).