The federal appeals court has rejected a complaint filed by participants in the Disney Savings and Investment Plan, upholding a November 2016 court decision dismissing complaints in a “consolidation of two similar lawsuits against the plan’s investment committee and various plan fiduciaries.” Defendants were accused of a breach of fiduciary duty of prudence by offering the Sequoia Fund in the Plan, despite its concentrated investment in Valeant Pharmaceuticals, a company facing investigation due to its drug practices. The stock price declined sharply as a result as did the value of the Sequoia Fund shares. In this case, the courts have consistently ruled that allegations based on public information or conjecture concerning a stock is not a basis for a breach. Further, the Plan’s SPD and the fund’s prospectus do cite the fund’s undiversified stance and the risks associated with the investment strategy.
www.planadviser.com; March 6, 2019.
www.pandionline.com; March 6, 2019.
www.planadviser.com; November 21, 2016 (original report source).