Plaintiffs sued under ERISA about the handling of company stock in RadioShack employees’ 401K plans. The Fifth Circuit affirmed dismissal. As to the claims based on ERISA’s duty of prudence, the Court reminded: “Dudenoeffer establishes that for publicly-traded stocks, ‘allegations that a fiduciary should have recognized from publicly available information alone that the market was over- or undervaluing the stock are implausible as a general rule, at least in the absence of special circumstances.'” Here: “Plaintiffs argue that Dudenhoeffer addressses only allegations that public information showed that a stock was overvalued, not claims that the stock was excessively risky. This distinction between claims that stock is overvalued and claims taht stock is excessively risky is ‘illusory.’ In an efficient market, market price accounts for risk. Plan fiduciaries cannot be expected to outperform the market or predict future stock performance using publicly available information.” Singh v. RadioShack Corp., No. 16-11587 (Feb. 6, 2018) (applying Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459 (2014)).
Recent Related Posts