Request Legal Help Now - Free

Advertisement
LAWSUITS NEWS & LEGAL INFORMATION

Sears Facing 401K Class Action Lawsuit

. By
Santa Clara, CASears Holding is facing an Employee Retirement Income Security Act (ERISA) class action lawsuit filed by employees who allege the company used its own stock as an investment option in the 401(k) plan, despite knowledge that the company was in in “extremely poor financial condition.”

According to the complaint, Sears’ stock had been “predictably declining since 2010.” However, the employees allege that 401(k) fiduciaries continued to purchase and hold the retailer’s stock.

The allegations state that in 2014 the plan’s stock fund lost a massive $4.5 million and in 2015 it lost a further $12.9 million. It wasn’t until December 2016 that the fiduciaries took action and froze future purchases of Sears stock, which essentially amounted to “far too little, far too late,” the employees state in their complaint.

A report by Bloomberg notes this is the second ERISA class action brought against Sears.The earlier lawsuit also alleged the national retailer held its own declining stocks in the company’s 401(k) plan. In that first lawsuit, Sears ended up paying $14.5 million to settle the allegations.

Employee benefits are an important form of compensation offered by many employers. When employers violate ERISA laws, employees may be able to file a lawsuit to recover money lost from their employee savings plan, employee stock options plan or other benefits plans covered by ERISA.

ERISA covers health plans, retirement plans and employee stock options plans, in which employees are given the opportunity to purchase shares of a company's stock at a certain price, often lower than the actual or anticipated market price of the shares.

Under ERISA laws, the people responsible for overseeing employee benefits plans (often referred to as fiduciaries) must follow specific guidelines. These include acting in the best interests of the plan participants; providing participants with plan information, including information about plan features and funding; and providing a grievance and appeals process for participants. Breaches of fiduciary duty can result in a lawsuit being filed against plan fiduciaries.

READ MORE ABOUT Financial
READ MORE ABOUT Consumer Fraud
READ MORE ABOUT Employment
READ MORE ABOUT Securities

ERISA Legal Help

If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to a financial lawyer who may evaluate your claim at no cost or obligation.

ADD YOUR COMMENT ON THIS STORY

Please read our comment guidelines before posting.


Note: Your name will be published with your comment.


Your email will only be used if a response is needed.

Are you the defendant or a subject matter expert on this topic with an opposing viewpoint? We'd love to hear your comments here as well, or if you'd like to contact us for an interview please submit your details here.


Click to learn more about LawyersandSettlements.com

Request Legal Help Now! - Free