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Compliance April 8, 2016
Partial Settlement Reached in RadioShack Stock Drop Case
A partial settlement has been reached in a stock drop case filed against the RadioShack company and its retirement plan trustees.
Reported by PLANSPONSOR staff
A partial settlement has been reached for $900,000 between the plaintiffs and trustee defendants in an Employee Retirement Income Security Act (ERISA) stock drop challenge involving RadioShack’s retirement plans, while allegations against the plan sponsor defendants are still outstanding.
On November 26, 2014, a former RadioShack employee filed a complaint in U.S. District Court for the Northern District of Texas, alleging that the fiduciaries of the company’s 401(k) plan violated their fiduciary duties under ERISA. Similar to other stock drop cases making their way through the federal courts, the complaint states that the fiduciaries failed to take steps to prevent plan participants from investing in RadioShack stock and protect them from the decline in RadioShack share price (see “Company Stock Cases”).
A fairness hearing will be held July 18 at 10 a.m. before U.S. District Court Judge Reed O’Connor to determine whether the proposed settlement should be granted final approval, among other things.
–Corie Hengst