Breach of Duty

News & Analysis as of

Supreme Court Ruling Emphasizes Need for Plan Monitoring

It appears court decisions frequently impact retirement plans. Starting with the U.S. Supreme Court, what impact will its recent ruling — confirming the ability of 401(k) participants to challenge high-cost investment options...more

Claims Administrators can be Liable for Violations of the Mental Health Parity Act

The Mental Health Parity and Addiction Equity Act (MHPA) requires health plans to treat mental health and physical health benefits in much the same manner and precludes restrictions on mental health benefits that are not also...more

Three Recent Delaware Decisions Highlight the Importance of Director Independence and Risks for M&A Financial Advisors

On September 28 and October 1, 2015, the Delaware Court of Chancery issued decisions in Caspian Select Credit Master Fund Limited v. Gohl, C.A. No. 10244-VCN and In re Zale Corporation Stockholders Litigation, C.A. No....more

RMBS Contract Claims Against Trustee Dismissed in Part

On October 2, 2015, Justice Saliann Scarpulla of the New York Supreme Court issued an Opinion and Order partially granting Bank of New York Mellon’s (“BNYM”) Motion to Dismiss an RMBS action brought by Commerce Bank and other...more

Portfolio Monitoring and Legal Fees Subject to SEC Enforcement Action Against Private Equity Group

The SEC announced that three private equity fund advisers within The Blackstone Group have agreed to pay nearly $39 million to settle charges that they failed to fully inform investors about benefits that the advisers...more

A WARNing to Directors and Officers — Failure to give proper WARN Act notice may breach your fiduciary duty

At first glance, Stanziale v. MILK072011, looks like someone suing over a bad expiration date and conjures up images of Ron Burgundy proclaiming “milk was a bad choice.” But in actuality Stanziale is much more interesting: it...more

Connecticut Supreme Court Expands Protection for Would-Be Whistleblowers

Connecticut whistleblowers were handed a siren to sound the alarm on employers this week. In interpreting the state constitution in Trusz v. UBS Realty Investors, LLC, SC 19323 (Conn. Sup. Ct., official release Oct. 13,...more

Post-Newman Reality: Investigations Involving Unwitting “Tips” to Close Friends and Relatives Will Continue

Earlier this week, the United States Supreme Court declined to hear the federal government’s appeal of the ruling by the Court of Appeals for the Second Circuit in U.S. v. Newman. This leaves intact the Second Circuit’s quid...more

Nature of Company's Defenses Can Expand Scope of Discovery

There is no question that, in a books-and-records action, the scope of discovery is limited and such discovery is not an appropriate means of obtaining the same books and records sought in the action. In Chammas v. NavLink...more

Court Of Chancery Explains Investment Banker Conflict Leads To Aiding And Abetting Claim

Here the banker failed to make a timely disclosure to its client that it had previously pitched the buyer to make a bid for the client. The Court found that in the context of a motion to dismiss the Board may have breached...more

M&A Update: Fully Informed Vote of Disinterested Stockholders Results in Business Judgment Rule Protection in Post-Closing Review...

In an October 2, 2015 decision, Corwin, et al. v. KKR Financial Holdings LLC., et al., the Delaware Supreme Court clarified that once a merger closes, as long as it has been approved by a fully informed vote of the...more

Supreme Court Denies Review of Second Circuit Insider-Trading Case

On October 5, 2015, the Supreme Court refused to grant review of the Second Circuit’s restrictive insider-trading decision in United States v. Newman. The Government, through the Solicitor General, had asked the Supreme...more

Does Wisconsin’s Four-Corners Rule Govern an Insurer’s Duty to Defend?

Those who follow the work of the Wisconsin appellate courts might recognize this question as one that District II of the Court of Appeals certified to the Supreme Court nearly five years ago in Wilkinson v. Arbuckle, 2011 WI...more

September 2015: White Collar Litigation Update

Recent Developments in Insider Trading Law. For the last 30 years, the seminal insider trading case discussing tipper/tippee liability has been the Supreme Court’s decision in Dirks v. SEC, 463 U.S. 646 (1983). In Dirks, the...more

Navigating Derivative Lawsuits Against Mutual Funds After Northstar

The Ninth Circuit Court of Appeals this spring held that mutual fund shareholders could maintain direct claims against the fund’s trustees for breach of their common law fiduciary duties. Before Northstar v. Schwab, such...more

A Summary of Predicted Litigation Under the DOL’s Proposed Fiduciary Rule

The Department of Labor’s recent Proposed Rule, which defines the term "fiduciary" as it applies to persons who provide "investment advice" to ERISA plans and IRAs, will impact the likelihood and severity of fiduciary...more

District Court Denies Class Certification in Excessive Fee Case Against Service Provider

The plaintiffs, three plan participants, filed their lawsuit in 2012 and purported to assert claims on behalf of a class of all plans serviced by the defendants, affiliated entities that provided services to the plans and/or...more

Financial Services Weekly News - September 2015 #5

Regulatory Developments - SEC Proposes to Amend Administrative Proceedings Rules: On Sept. 24 the SEC announced that it had voted to propose amendments to rules governing its administrative proceedings. The...more

Federal District Court Addresses Measure of Damages in ERISA Breach of Fiduciary Duty Case

Fiduciaries of two defined contribution retirement plans sponsored by the same employer (the “Plans”) sued the Plans’ former investment manager for breach of ERISA fiduciary duties and state law violations in connection with...more

Employee Benefits Developments - September 2015

IRS Issues New Draft Form 1095-C and Instructions. On August 6, 2015, the IRS published its most recent updates to Form 1095-C and the instructions for Forms 1094-C and 1095-C. Beginning in early 2016, applicable large...more

Court Of Chancery Spells Out Aiding And Abetting Claim Requirements

Aiding and abetting claims are often filed against those who have worked with a fiduciary that is breaching his fiduciary duty. This decision explains the requirements for such a claim, particularly the need to show the...more

Getting Your Money Back: New Jersey Employers Can Disgorge A Disloyal Employee’s Salary

In a recent ruling, the New Jersey Supreme Court gave employers a great recourse for dealing with former employees who breach their duty of loyalty. In Bruce Kaye v. Alan P. Rosefielde, the Court allowed an employer to...more

Fifth Circuit Affirms Dismissal of Claims Involving De-risking of Pension Assets

In October 2012, a defined benefit plan sponsor amended its plan to provide that, effective Dec. 7, 2012, the plan would purchase an annuity to cover the plan’s obligations to make payments to the roughly 41,000 participants...more

New Jersey Supreme Court Holds That Economic Loss is Not Needed To Recoup a Former Employee’s Salary for Breach of the Duty of...

On September 22, the New Jersey Supreme Court unanimously gave the green light to awards of the remedy of equitable disgorgement, even in the absence of economic loss, as a fair and practical response to an employee’s...more

In re Riverbed: The Beginning of the End for Disclosure-Only Settlements in M&A Cases?

The past decade has seen an incredible rise in M&A litigation. According to Cornerstone, in 2014, a whopping 93% of announced mergers valued over $100 million were subject to litigation, up from 44% in 2007. As Delaware...more

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