U.S. District Judge Patti B. Saris of the U.S. District Court for the District of Massachusetts dismissed a charge that the company had breached its Employee Retirement Income Security Act (ERISA) fiduciary duty by negligently misrepresenting the quality of its investment portfolio in a Securities and Exchange Commission regulatory filing and an October 2008 news release.
While State Street insisted in its public statements that the “asset quality of both our investment portfolio and the conduit program remains high,” the suit claimed, the company’s actual exposure to high risk assets contributed to a significant decline in its share price.
Saris ruled that because plaintiff Thomas Kenney admitted he had not read the regulatory filing or the news release, he could not show he had relied on it to his harm. Saris threw out most of the claims in Kenney’s suit in March 2010 (see Court Dismisses Most Claims in State Street Stock Suit).
Kenney filed the class action in 2009 on behalf of himself and others participants in the State Street Salary Savings Plan who chose to invest their retirement savings in State Street’s ESOP between January 3, 2008, and January 20, 2009.
The case is Kenney v. State Street Corp., D. Mass., No. 1:09-CV-10750-PBS.