Fiduciary Liability

News & Analysis as of

Summary of California Appellate Decisions - June 2014

Insurance Coverage; Professional Services Exclusion; Completed Operations; Duty To Defend: North Counties Engineering, Inc. v. State Farm General Insurance Company (2014) 224 Cal.App.4th 902, 169 Cal.Rptr.3d 726...more

Seventh Circuit Reverses Summary Judgment in Case Applying ERISA’s Statute of Limitations

A Seventh Circuit panel declined to apply ERISA’s three-year statute of limitations to bar fiduciary claims in a case arising out of a buy-out transaction involving an employee stock ownership plan. The court held that the...more

Sixth Circuit Addresses Plan Assets and Limitations Issues in Holding Service Provider’s Fee Assessments Constituted Self-Dealing

The Sixth Circuit held in Hi-Lex Controls, Inc. v. Blue Cross and Blue Shield of Michigan that a service provider was liable as a fiduciary under ERISA for unauthorized fees it assessed against a self-funded health plan. In...more

"Supreme Court Holds No Presumption of Prudence for ESOP Fiduciaries"

Today, in a unanimous decision, the Supreme Court of the United States held in Fifth Third Bancorp v. Dudenhoeffer that fiduciaries of employee stock ownership plans (ESOPs) that invest in the employer’s securities are not...more

Some plan sponsors will only “get it” when it’s too late

I talk to a lot of advisors and I have many advisor clients around the country and one of the things that I keep on hearing is that even with fee disclosure regulations almost 2 years later, it is still difficult to get...more

ERISA Litigation: What Benefits and Other Professionals Need to Know

In This Presentation: - Stephens v. Citation Corp. (N.D. Ala. 2010) (Acker, J.) - Erisa Topics Today - ERISA Preemption: Good or Bad? - Provident Internal Memorandum re: ERISA, Oct. 2,...more

The proposed Fiduciary Rule and the selling of Fear

I’m a Howard Stern fan since I was about 11. I’m sorry if you’re offended, but I love that brand of humor. One of the main producers of funny materials are guys by the name of Sal & Richard. Aside from their phony calls, they...more

Fifth Circuit Denies Deferential Review for Fiduciary Actions

Many employee benefit professionals are aware of the deferential standard of review provided to plan fiduciaries in accordance with the 1989 United States Supreme Court ruling in Firestone Tire & Rubber Co. v. Bruch. That...more

How a Plan Sponsor Can Avoid Being a Deer Caught in the Headlights

The term “deer in the headlights” explains the mental state of a person who shows behavioral signs that remind us of a deer subjected to a car’s headlights where the deer is in such panic that they show no motor reaction to...more

Unpaid Employer Contributions as Plan Assets: Expansion Of Liability Under ERISA

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), requires trustees of multiemployer pension and benefit funds to collect contributions required to be made by contributing employers under their...more

Who’s in Charge – Is the Board Responsible to Monitor Its Financial Advisor or Vice Versa?

In the case of In re Rural Metro Corporation Stockholders Litigation, the Court of Chancery of the State of Delaware held that the primary financial advisor retained by Rural/Metro Corporation aided and abetted the board in...more

In Tiblier, Fifth Circuit Holds Investment Advisor Was Not a Fiduciary With Respect to Investment that Resulted in Plan Losses

The Fifth Circuit ruled last month that a plan investment advisor could not be held liable under ERISA for plan losses as a result of an investment, where the advisor did not act as a fiduciary with respect to that...more

Practice Tips for M&A Practitioners for 2014

Based on a number of cases decided by the Delaware courts in 2013, below we summarize practice tips regarding careful drafting of contractual provisions and complying with technical and statutory requirements....more

Court’s Award of $3.8 Million Raises Questions About the Scope of ERISA Remedies

The U.S. Court of Appeals for the Sixth Circuit has affirmed an unusually large award of $3.8 million in a case involving the denial of long-term disability benefits. In Rochow v. Life Insurance Company of North America, No....more

Dumb Things Retirement Plan Sponsors Should Avoid Doing

Whoever said that there is no such thing as a dumb question obviously wasn’t in attendance at my Global History class in high school when someone asked whether it was true that if you take a picture of an Amish person, the...more

Supreme Court to Review Sixth Circuit’s Reinstatement of ERISA “Stock-Drop” Class Action

The Supreme Court recently agreed to resolve a circuit split on the pleading requirements for claims that ERISA fiduciaries imprudently invested employee stock ownership plan (ESOP) assets in the stock of the...more

Auditors’ Liability to Third Parties: Small closely-held corporations

In Waxman v. Waxman (2004), 186 OAC 201, the Ontario Court of Appeal considered whether the Hercules Managements analysis is applicable in a case brought by a shareholder of a small, closely- held corporation where concerns...more

Things They Never Tell You as a 401(k) Plan Sponsor

When my wife and I bought our house, there were quite a few things that the previous owner forgot to tell us such as the fact they never bothered to pull the pipes from the dental office run by a previous owner 20 years...more

If it ain’t broken, don’t fix it and other complacent Plan Sponsor excuses

One of the most annoying phrases out there is: “if it ain’t broken, don’t fix it”. I have disliked it for more than 20 years after seeing a student government political candidates use it back at Stony Brook. Through...more

Corporate and Financial Weekly Digest - Volume VIII, Issue 45

In this issue: - SEC Chair Mary Jo White Outlines Potential Changes to “Accredited Investor” Definition - CFTC Issues Final Rules for Systemically Important Derivatives Clearing Organizations - CFTC...more

Misbehaving Directors, Including Directors’ Duties To Maintain The Confidentiality Of Information

I. Introduction. The conduct of corporate directors and officers is subject to particular scrutiny in the context of business combinations (whether friendly or hostile), executive compensation and other affiliated...more

The Smaller Stuff Creates the Biggest Liability Pitfalls for 401(k) Plan Sponsors

When I was a kid, I had an Intellivision. For those people born after 1980, Intelliivision was video game console that had better graphics than an Atari 2600 but people didn’t buy. One of my favorite games on Intellivision...more

Retirement Plan Sponsors Need To Be Careful About Buying “Fiduciary Services”

Unlike other languages, English is full of deceptive words that entice people to purchase products and services they think they are getting when they are not. It happens a lot with food. Lemon flavored products have no lemons...more

What to Do If You Believe a Fiduciary is Mishandling Assets

It is quite common for beneficiaries, shareholders and other parties in interest to have questions or concerns about how a fiduciary is handling their affairs. Sometimes these concerns can bloom into full-fledged litigation...more

So, You inherited an unreported offshore account, now what!

There may have been a time when inheriting an unreported offshore financial account was not problematic; but not today. The executor/trustee of the estate of the decedent has fiduciary responsibility to IRS and faces personal...more

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