What is the Correct Standard of Prudence in Employer Stock Cases?

New York University Review of Employee Benefits and Compensation - 2012, LexisNexis, 2012

63 Pages Posted: 7 Feb 2014

Multiple version iconThere are 2 versions of this paper

Date Written: 2012

Abstract

This Article proposes a uniform standard of review to be applied in ERISA employer stock class action suits. It discusses ERISA, types of retirement plans, and respective duties of fiduciaries. It also analyzes the modern portfolio theory and its shortcomings. Lastly, it addresses the investment in employer stock in defined contribution retirement plans, the presumption of prudence, and the standard that should be adopted by the Supreme Court. Update: United States Supreme Court Granted Cert. on Dec. 13, 2013: Fifth Third Bancorp v. Dudenhoeffer (Decision Below: 692 F. 3d 410).

Keywords: ERISA, Employer Stock, Employer Securities, Fiduciary Responsibility, Diversification, Modern Portfolio Theory, Breach of Fiduciary Duty, Presumption of Prudence, Moench Presumption, Pleading, Evidentiary, Motion to Dismiss, Summary Judgement, United States Supreme Court

JEL Classification: k4

Suggested Citation

Jara, Jose Martin, What is the Correct Standard of Prudence in Employer Stock Cases? (2012). New York University Review of Employee Benefits and Compensation - 2012, LexisNexis, 2012, Available at SSRN: https://ssrn.com/abstract=2391485

Jose Martin Jara (Contact Author)

Buck Consultants ( email )

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New York, NY 10167
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212-330-1114 (Phone)

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