Under the agreement, former Bear Stearns workers who suffered large losses by holding company stock in their retirement plan will recover $10 million in a settlement with J.P. Morgan Chase & Co, which bought Bear in 2008, according to Reuters.
The former employees alleged that the company breached its fiduciary duties by continuing to offer Bear Stearns stock as an investment option in the Bear Stearns Employee Stock Ownership Plan, despite the fact that they knew Bear Stearns stock to be an imprudent investment (see “Court Consolidates Bear Stearns Suits”). The plaintiffs allege that on March 10, 2008, information about Bear Stearns liquidity problems began leaking into the market causing its stock price to drop. When it was announced that J.P. Morgan agreed to purchase Bear Stearns, the stock price fell to $4.30 per share from a 15-month high of approximately $160.
The case is In re: Bear Stearns Companies ERISA Litigation, U.S. District Court, Southern District of New York, No. 08-md-01963.
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