Efficient market hypothesis wins again.

Applying Singh v. RadioShack Corp., 882 F.3d 137 (5th Cir. 2018), which in turn relied upon Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459 (2014), the Fifth Circuit rejected a duty-of-prudence claim against an ERISA fiduciary based on the defendants allowing investments to continue a troubled company’s stock. Specifically, the plaintiffs alleged that the defendants “knew that it was inappropriate to rely on the market price of Idearc stock because their own fraudulent activities had caused the public markets to overvalue Idearc stock.” The Court did not agree: “[T]he alleged fraud is by definition not public information, and [Plaintiff] does not address how this information would affect the reliability of the market price ‘as an unbiased assessment of the security’s value in light of all public information.'” No. 16-11590 (June 27, 2018).