Compliance September 30, 2010

BP Lawyers Say Lawsuits Should be Combined

Lawsuits by workers claiming BP Plc’s North American unit mismanaged their retirement savings plan should be sent to the Texas court already handling investor claims prompted by the Gulf of Mexico oil spill, company lawyers told a panel of judges.

Reported by

Rebecca Moore

Bloomberg reports that the employees previously asked that the suits be combined in Chicago, where the retirement plan is administered and where seven of the eight suits were filed. But BP told the seven-judge multidistrict litigation panel that the cases belong in Houston because the claims are similar to those in other investor suits.

“The important thing to focus on here is the vast overlap in discovery,” or evidence-gathering, Daryl Libow, BP’s attorney, told the judges, according to Bloomberg. “Five of the seven members of the employee plan oversight committee are in Houston.”

For more stories like this, sign up for the PLANADVISERdash daily newsletter. 

However, lawyers for the workers pointed out in court papers that the key legal issue in their actions is whether the company stock was a prudent investment for the plan during the class period, which is not an issue in the securities actions.

In the suits, filed as class actions on behalf of all U.S. employees participating in the company’s retirement savings plan, workers claim losses of more than $1 billion from the stock plunge after the April 20 spill. The employees claim that BP Corp. North America Inc. and members of the savings plan committee breached their fiduciary duty under the Employee Retirement Income Security Act to the investors in the BP stock fund (see FL Woman Sues BP Over 401(k) Stock Losses).

The workers claim BP should have known that inadequate safety measures in place by the company made the company stock a no longer prudent investment.

The news report said BP is facing more than 400 lawsuits over the offshore oil spill caused by the April 20 explosion of the Deepwater Horizon rig in the Gulf of Mexico. Claims by fisherman, restaurants, real estate interests, governments and others for economic losses have been combined with personal injury and wrongful-death suits for pretrial treatment in a multidistrict litigation in federal court in New Orleans.

The multidistrict litigation panel in August consolidated lawsuits over claims that the company misled investors before and after the spill and sent those cases to a judge in Houston. The panel told the workers’ lawyers last month to show why their cases shouldn’t go there as well.

Data & Research September 30, 2010

Asset Management Firms Dipping into Social Media

Corporate Insight recently found that 45% of the asset management firms it tracks are employing social media in some way.

Reported by

Rebecca Moore

While the majority of these firms use social media to connect to consumers, a few use Facebook and Twitter to reach out to financial advisers as well, the company said.

In 2008, Corporate Insight found that asset management firms were less likely to use social media than banks, credit card issuers and brokerage firms. At the time, just 13% of mutual fund firms and 17% of annuity issuers had a corporate-sponsored Facebook profile. However, of the 41 asset management firms tracked, 17 now feature company-sponsored pages on Facebook and 16 are now on Twitter. In addition, four firms have launched blogs.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news. 

Corporate Insight said that FINRA’s Regulatory Notice 10-06, helping to clarify a firm’s responsibilities with regard to social media tools, has inspired some firms to begin to use Facebook, Twitter, blogs and other interactive features.

James McGovern, Vice President of consulting services at Corporate Insight, said in a press release that even as asset management firms are dipping into social media, “many of the firms we track do not appear to have a clear strategy for gathering fans and followers and leveraging these social media efforts.”

Of the 16 firms Corporate Insight tracks that are using Twitter, roughly one-third are using their profiles to interact with their followers on a regular basis. Despite the growing number of banks, brokerages and credit card issuers who now use Twitter as a customer service channel, only two asset management firms have used their accounts to provide customer assistance, and even these firms have done so in a very limited capacity. The majority employ a single, general interest profile on Twitter and Facebook to drive traffic to their websites via links to market commentaries, educational articles and tools, according to the press release.