Breach of Duty Must be More Than Misreading the Market
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Breach of Duty Must be More Than Misreading the Market

A former employee filed a derivative suit on behalf of his employer's defined-contribution retirement savings plan and, in the alternative, as a putative class action on behalf of plan participants, claiming the employer and others breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA). The plaintiffs asserted the employer knew or should have known that it was in poor financial condition and faced poor long-term prospects and therefore should have removed its stock from the plan’s assets. The Eighth Circuit affirmed dismissal and held that, under the U.S. Supreme Court decision in Fifth Third Bancorp v. Dudenhoeffer, the plaintiff's allegations did not pass muster to plausibly state a claim for breach of the duty of prudence based on public reporting of its financial state.

Usenko v MEMC LLC