In Re First American Corp. ERISA Litigation

Court Ruling on Defendants' Motion to Dismiss


Court denied motion to dismiss complaint by employees of First American Corp. whose 401(k) Plans declined sharply in value due to investment in First American stock. The Court found plaintiffs had adequately stated a claim under ERISA by alleging (1) that defendants were fiduciaries of the Plan; (2) that the price of First American's stock had become artificially inflated through false or misleading information provided by company executives; (3) that it was a breach of fiduciary duty for the fiduciaries to purchase or maintain imprudent investments in artificially inflated stock; and (4) that defendants had a duty to provide true and accurate information about investments to Plan Participants.

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Published In: Labor & Employment Updates

Reference Info:Decision | Federal, 9th Circuit, California | United States