State Street Corp.’s $1.3 billion Salary Savings Program 401(k) plan is being examined by two law firms for possible ERISA violations, confirmed Warren Pyle and Ellen Doyle, officials at the law firms.
The firms—Pyle Rome Lichten Ehrenberg & Liss-Riordan and Stember Feinstein Doyle & Payne—are looking into whether plan fiduciaries knew or should have known their statements about the company’s financial health were incorrect. The firms said the statements could have contributed to Boston-based State Street shares being overvalued.
State Street on Tuesday, January 20, said it had an unrealized loss as of December 31 of $9.1 billion, an increase of nearly $5 billion in the fourth quarter, causing the company’s stock price to plunge to $14.43 from $19.89 that day. Doyle, an attorney at Stember Feinstein, said the resulting drop in stock price prompted losses in State Street’s employee stock option plan, which as of December 2007 held $400 million in State Street stock.
“We are investigating the claims right now and are in discussions with employees at the company about the problems,” Doyle said.
State Street spokeswoman Arlene Roberts was not immediately available for comment.
Filed by John D’Antona Jr. of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce com.
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