SCOTUS asked to revisit ESOP duty under Fifth Third

By Anne Sherry, J.D. In Fifth Third Bancorp v. Dudenhoeffer (U.S. 2014), the Supreme Court established pleading requirements for an investor to state a claim for breach of the duty of prudence against a fiduciary of an employee stock ownership plan. IBM ESOP defendants have petitioned the Court for a writ of certiorari to examine, in light of a circuit split, whether a plaintiff can satisfy this pleading standard by alleging generally that the harm from a fraud increases the longer it goes on (Retirement Plans Committee of IBM v. Jander, March 4, 2019). Comparing early disclosure to later disclosure. Under a restrictive reading of Fifth Third, a plaintiff must plausibly allege an alternative action that a prudent fiduciary in the same circumstances could not have viewed as more likely to harm than to help the fund. The Second Circuit determined that the plaintiffs met this threshold. The ESOP defendants allegedly knew that IBM stock was artificially inflated due to an…

Read more detail on Recent Securities Law posts –

Related news:

This entry was posted in Securities Law and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply