Benefits October 1, 2010

Fox News Sued by EEOC

October 1, 2010 (PLANSPONSOR.com) – The Equal Employment Opportunity Commission says New York-based Fox News Network LLC retaliated against a news reporter after she complained to Fox that she was subjected to disparate pay and unequal employment opportunities because of her gender and age.
Reported by

In a lawsuit filed this week, the EEOC says during 2007 Catherine Herridge made several complaints to management officials at Fox News about employment practices that she believed were discriminatory. Fox conducted an investigation into Herridge’s allegations beginning around December 2007, but notified Herridge that no evidence of age and sex discrimination had been found.  

According to an EEOC news release, around the summer or fall of 2008, Fox News included language in Herridge’s employment contract, which was set for renewal, which referenced Herridge’s discrimination complaints and was intended to stop Herridge from making more of them in the future.  Herridge refused to sign the employment contract until the language was removed, and Fox refused to negotiate further with Herridge, would not respond to counteroffers as to substantive issues in the proposed contract, and ceased speaking to her agent or to her about her contract.  

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As a result of Fox’s refusal to proceed with a new employment contract absent the retaliatory language, Herridge became an “at-will” employee without any job protections, causing her considerable stress, the EEOC alleged.  It was only after Herridge filed a charge of discrimination with the EEOC, and an EEOC investigator conducted an on-site investigation, that Fox agreed to take out the retaliatory language and presented Herridge with a new contract with the retaliatory language removed, which she signed.  

The lawsuit seeks monetary relief for Herridge, including compensatory and punitive damages and an injunction enjoining Fox News from engaging in further retaliation against employees based on their opposition to employment practices which the employee reasonably believes to be unlawful under the federal statutes enforced by the EEOC. 
Administration October 1, 2010

Regulators Release Flash Crash Probe Report

October 1, 2010 (PLANSPONSOR.com) – A trading firm’s use of a computer sell order triggered the May 6 market plunge, which sent the Dow Jones industrial average dropping nearly 1,000 points in less than a half-hour.
Reported by

A report issued Friday by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) determined the so-called “flash crash” was caused when the trading firm executed a computerized selling program in an already stressed market, the Associated Press reported.  The firm’s trade, worth $4.1 billion, led market players to swiftly pull their money from the stock market.

While the report does not name the trading firm, an unnamed Associated Press source identified it as Waddell & Reed, based in Shawnee Mission, Kansas.

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The stock market was already stressed even before the plunge that day, according to the report, and anxiety was mounting over a debt crisis in Europe. The Dow Jones was down about 2.5% at 2:30 p.m. when the trader placed an enormous sell order on a futures index of the S&P’s index. The trade on the E-Mini S&P 500 was automated by a computer algorithm that was trying to hedge its risk from price declines.

According to the Associated Press, in that one trade, 75,000 contracts were sold in a span of 20 minutes. It was the largest single trade of that investment since the start of the year; the firm’s previous transaction of that size took more than five hours, the report notes. The trade triggered aggressive selling of the futures contracts and that sent the index down about 3% in four minutes. Nearly 21,000 trades were canceled in the coming weeks because the exchanges deemed them erroneous.

Responding to the episode, the SEC and the major U.S. exchanges, agreed on a six-month pilot program that briefly halts trading of some stocks that mark big price swings (see SEC Approves, Extends New Circuit Breakers).  The new circuit breakers are in effect until December 10. Under the rules, trading of any Standard & Poor’s 500 stock that rises or falls 10% or more within a five-minute span is halted for five additional minutes, the AP said.

The 104-page SEC-CFTC report is at http://www.sec.gov/news/studies/2010/marketevents-report.pdf. 

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