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Benefits May 5, 2008
Sprint Sued for Fiduciary Breach over Company Stock
May 5, 2008 (PLANSPONSOR.com) - A participant in the
Sprint Retirement Savings Plan of Sprint Nextel Corporation
has sued the company and other plan fiduciaries for
continuing to offer company stock as a plan
investment.
Reported by Rebecca Moore
The plaintiff alleges that the defendants breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by continuing to offer Sprint stock as an investment option and continuing to make contributions in Sprint stock when it was imprudent to do so. The suit also claims the company failed to provide participants with accurate and complete information about Sprint stock and the risks of investing in it.
The suit noted several occasions when Sprint cut employees, issued statements that it was making changes to the organization for financial reasons, and reported losses on its financial statements from May 2007 to the present. The participant says the company should have known its stock would be an imprudent investment.
According to the suit, Sprint’s stock price dropped 65% from June 2007 to the present, and that its retirement plans suffered tens of millions of dollars in losses.
The suit seeks class action status on behalf of participants and beneficiaries in the Sprint Retirement Savings Plan and the Sprint Retirement Savings Plan for Bargaining Unit Employees.
The suit is here .
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