According to a report on The Auto Channel Web site, in the ruling, Judge Nancy Edmunds says GM had a duty to convey complete and accurate financial information about GM’s true financial health to the plaintiffs.
The suit claims the defendants put the interests of GM ahead of the interests of the plan participants by continuing to offer GM stock as an investment option, matching employee contributions in GM stock and failing to diversify the stock fund when it was clear GM stock was not a prudent investment, the news report said. The case involves two GM retirement plans – the Personal Savings Plan for Hourly Employees and the Savings-Stock Purchased Program for Salaried Employees.
According to the suit, the fact that members of the investment fund committee were also responsible for overseeing the underfunded defined benefit pension and healthcare plans should have warned them of GM’s problems early on. “Even when analysts begin issuing ‘sell’ recommendations and the company’s debt was reduced to junk status, the committee refused to take action for their employees,” said Steve Berman, co-lead counsel for the plaintiffs.
While denying GM’s motion to dismiss the suit, the judge granted a motion by State Street Bank to dismiss the charges against it.