Fifth Third Bancorp v. Dudenhoeffer

Employee Stock Ownership Plan fiduciaries are not entitled to any special presumption of prudence with respect to investment decisions. They are subject to the same duty of prudence that applies to ERISA fiduciaries in general under 29 U.S.C. Sec. 1104(a)(1)(B), except that they need not diversify the fund’s assets as provided by Sec. 1104(a)(2). Whether a complaint--alleging that ESOP fiduciaries breached their duties of prudence--states a claim must be determined by applying the "plausibility" standard of pleading discussed in Ashcroft v. Iqbal, 556 U. S. 662. Where a stock is publicly traded, allegations that a fiduciary should have recognized on the basis of publicly available information that the market was overvaluing or undervaluing the stock are generally implausible and thus insufficient to state a claim. A complaint for breach of the duty of prudence must plausibly allege an alternative action that the defendant could have taken, that would have been legal, and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it.
     Fifth Third Bancorp v. Dudenhoeffer - filed June 25, 2014
     Cite as 2014 S.O.S. 12-751_d18e

For More Information Contact us at:
http://www.beverlyhillsemploymentlaw.com/