A judge found, however, that the plaintiffs did not sufficiently show that Lehman's former directors breached their duty to plan participants. Among the allegations were that Lehman's directors knew or should have known about Lehman's poor financial condition but allowed the ERISA plan's assets to remain in Lehman stock.
In dismissing the lawsuit, which was filed under the Employee Retirement Income Security Act (ERISA), the judge wrote that "Cause for concern is not a dire situation," (as quoted by Reuters; 10/05/11). He further wrote that the plaintiffs did not connect plan fiduciaries to anything that should have alerted them to Lehman's financial situation. A lawyer for the plaintiffs said they are preparing an appeal of the dismissal.
Lehman Brothers filed for bankruptcy in September 2008.
ERISA laws are designed to protect participants of employee savings and employee stock options plans. In some cases, plan fiduciaries have been found responsible for losses in employee plans where the fiduciaries failed to take action to protect a plan's assets. Unfortunately, some employee plan participants say their employee plans have hidden fees that eat into the plan's assets.
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The Ameriprise lawsuit was filed under ERISA and alleges that the plan paid millions of dollars in fees prohibited by ERISA, which cost the plan millions of dollars in losses. The lawsuit seeks class-action status. According to the lawsuit, some 401(k) plans charge an annual $25 administrative fee per participant but Ameriprise employees faced a record-keeping fee that increased along with the plan's value.