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Prepare for Class Action Litigation in Wake of Supreme Court Decision

Will the U.S. Supreme Court’s recent decision overturning the so-called Moench presumption of prudence for company stock spawn a new wave of lawsuits by the plaintiff’s bar? It looks that way, with a recent investigation of RadioShack begun by a New York-based law firm specializing in securities fraud, ERISA and employment class actions. RadioShack stock has lost 90% of its value since 2010.

So what should a plan fiduciary do? The Wilkins Finston Law Group recommends that fiduciaries which have publicly traded as well as non-public stock in their ERISA plan should:

• get fiduciary training;
• create an IPS specifically for ESOPs;
• create a written process to monitor and value non-traded stock; and
• hire an independent fiduciary if the plan fiduciary is wearing multiple hats.

Stay tuned — more is surely to come.

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