Pittsburgh, PA:The whole idea behind an ERISA plan as a vehicle to park and grow employee retirement benefits is to provide the plan participant a level of protection against losses caused by mismanagement of the plan or imprudent investments. To that end, an employee of Bank of New York Mellon Corp (BNY Mellon) filed a lawsuit against her employer alleging a breach of fiduciary duty in managing the assets of the plan.
As summarized in the November 5 edition of the Pittsburgh Tribune Review, plaintiff Isabel F. Sansano has taken BNY Mellon to task for losses in asset value to the plan. With her five-count lawsuit filed in federal court in Pittsburgh, Sansano is holding the bank, together with about 30 directors and other executives, to the fire for losses.
Such a loss in asset value in the employee stock plan would, presumably, affect retirement benefits for Sansano and her fellow employees.
In the 64-page complaint, which Sansano is attempting to certify as a class action, the pension fund managers at BNY Mellon are accused of investing heavily in the bank's own stock. The problem, according to the lawsuit, was a dramatic drop in the stock value resulting from alleged mismanagement on the part of certain bank executives through the overcharging of foreign currency trading clients.
The lawsuit contends that the employee savings plan was negatively impacted when BNY Mellon stock dropped to $18.97 this past October from a high—in January 2008—of $49.40.
The overcharging, according to the Tribune Review, was revealed following the filing of lawsuits by attorneys general in three states: New York, Florida and Virginia.
In addition to Sansano's lawsuit, two other actions have been filed by the Federal Department of Justice and securities regulators representing the state of Massachusetts, alleging the bank overcharged clients—and thus committed fraud—by as much as $2 billion over the last decade.
Sansano's lawsuit alleges the BNY Mellon employee 401(k) plan has lost millions in asset value since 2008, as the result of the stock price plunge.
The Employee Retirement Income Security Act of 1974 (ERISA) holds that those entrusted with the task of managing ERISA benefits conduct their actions with the best interest of the investor in mind, eschewing any temptation toward personal gain or that of the employer. Thus, ERISA provides a safety net for investors in an employee savings plan—or those holding employee stock options—providing peace of mind toward the availability of sufficient funds when it comes time to retire.
Employees saving for retirement depend on the output from their peak income-earning years, together with prudent investment decisions, to provide an adequate pool of funds to keep them when they can no longer work. Once retired, there is little opportunity to turn back the clock—although some retirees have been forced back to the job market after employee 401(k) benefits were lacking.
The Sansano lawsuit states that the defendants, according to ERISA statutes, must repay any losses in the ERISA plan caused by a breakdown in fiduciary duty. Employees encountering similar losses in retirement plan value often file lawsuits. Sansano hails from New Jersey.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an employment law lawyer who may evaluate your Employee Stock Option claim at no cost or obligation.
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As summarized in the November 5 edition of the Pittsburgh Tribune Review, plaintiff Isabel F. Sansano has taken BNY Mellon to task for losses in asset value to the plan. With her five-count lawsuit filed in federal court in Pittsburgh, Sansano is holding the bank, together with about 30 directors and other executives, to the fire for losses.
