Another Post-Dudenhoeffer (U.S. Supreme Court in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. ___, 134 S. Ct. 2459 (2014))'Stock Drop' Casualty, Opinion by ARNOLD F. SOCK, Attorney at Law
Exxon Mobil Corporation and certain of its senior corporate officers who serve as fiduciaries (trustees) to the Exxon Mobil Savings Plan recently staved off a challenge to their plan investment decisions in Fentress v. Exxon Mobil Corp.(U.S. District Southern District of Texas Houston Division Fentress v. Exxon Mobil Corp. 4:2016cv03484[1] The challenge, brought by current and former Exxon employees who participate in the plan and their beneficiaries (collectively, investors), alleged that Exxon and the trustees “knew or should have known that Exxon’s stock had become artificially inflated in value due to fraud and misrepresentation.” The investors failed to allege sufficient facts to bring a duty of prudence claim based on publicly available information against Exxon and its plan fiduciaries, Judge Keith P. Ellison of the U.S. District Court for the Southern District of Texas held
The decision is the latest defeat for workers who have been challenging losses in retirement savings following drops in company stock price under the Employee Retirement Income Security Act. These challenges have seen almost no success since 2014, when a U.S. Supreme Court decision made it harder to bring fiduciary breach claims under ERISA.Also see: U.S. Supreme Court in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. ___, 134 S. Ct. 2459 (2014)
Opinion by ARNOLD F. SOCK, Attorney at Law