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Administration August 2, 2002
Providian Charged with Fiduciary Breach
February 8, 2002 (PLANSPONSOR.com) - A group of
current and former employees of Providian Financial Corp.
have filed an ERISA fraud lawsuit against the credit card
issuer, charging that it breached its fiduciary
duties.
Reported by Camilla Klein
According to the employees’ lawyers, Providian was made aware of numerous practices that made Providian’s stock an inappropriate retirement plan investment from July 17 last year – but failed to inform the 401(k) retirement plan participants.
Instead, the suit charges, Providian encouraged participants and beneficiaries of the Plan to continue to make investments in the company’s stock within the defined contribution plan.
Providian specializes in lending to people with bad credit histories. Many of its customers lost their jobs when the economy hit the skids last year and were unable to make their credit card payments.
Providian’s stock, the worst performer in the S&P 500 index last year, lost 94% of its value over the year.
Seattle-based law firm Keller Rohrback, which is representing the employees, has created a Web site , which includes updated information on the case.