Administration May 28, 2009

Milberg Announces Puerto Rican Bank ERISA Probe

May 28, 2009 (PLANSPONSOR.com) - The Milberg class action law firm has announced an investigation into actions by Popular Inc. U.S.A., a San Juan, Puerto Rico-based financial services firm, for the potential filing of a stock drop lawsuit.
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A Milberg news release said the firm is investigating possible violations of the Employee Retirement Income Security Act (ERISA) in its handling of the Popular, Inc. U.S.A. 401(K) Savings & Investment Plan by keeping company stock as a 401(k) plan investment option when it was no longer prudent to do so and by not fully disclosing its true financial condition to participants.

Specifically, the news announcement said, the firm is looking into whether the company disclosed:

  • that its deferred tax assets related to its U.S. operations were materially overstated;
  • that the Company was experiencing increasing loan losses in Puerto Rico and the U.S. construction sectors;
  • that the quality of the Company’s remaining mortgage-related loans in its U.S. mainland portfolios and other assets were deteriorating and were materially overstated;
  • that the Company was experiencing a higher percentage of non-performing loans; and
  • that the Company’s new loan originations were declining and as a result the Company would soon be facing liquidity concerns and would be forced to cut or eliminate its dividend to shareholders.

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