Benefits September 24, 2008

Baltimore Energy Firm Probed for Stock Drop Allegations

September 24, 2008 (PLANSPONSOR.com) - A Pittsburgh law firm is investigating allegations that a Baltimore energy company committed a fiduciary breach in its handling of the company stock in its Constellation Energy Group, Inc. Employee Savings Plan 401(k).
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A news release from the Stember Feinstein Doyle & Payne firm said it is looking into whether actions by Constellation Energy Group violated the Employee Retirement Income Security Act of 1974 (ERISA) by making inaccurate statements about its financial health and causing its share price to be artificially inflated.

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Specifically, the firm is investigating whether Constellation committed the breach by:

  • continuing to offer Constellation Energy common stock as an investment option for participant contributions when it was imprudent to do so;
  • failing to take action to sell Constellation Energy stock or otherwise protect the plan ‘ s assets; and
  • accepting a deal with MidAmerican Energy Holdings Co. that allegedly does not provide full value for the shares held by plan participants.

“Stock drop” lawsuits are one of several litigation varieties facing plan sponsors (See It’s a Jungle Out There ).

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