Ninth Circuit Adopts Moench Presumption in Favor of Fiduciaries

In Quan v. Computer Sciences Corporation, No. 09-56190, D.C. No. 2:08-cv-02398-SJO-JWJ, September 30, 2010, the Ninth Circuit has made clear it will apply the so-called Moench presumption in favor of fiduciaries who manage employer stock investments for 401(k) plans and ESOPs.

Quan involved a fact pattern fairly common among employer-stock drop cases. Computer Sciences Corporation ("CSC") made substantial errors in running its stock option program and in the related tax accounting for the stock option plans. When these problems came to light, the price of CSC's publicly traded stock suffered a 12% drop in one day. It appears that the stock price recovered fairly quickly after these events.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Civil Procedure Updates, Civil Remedies Updates, Finance & Banking Updates, Labor & Employment Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »