Compliance October 20, 2010

Employer in Stock Drop Case Gets 2nd Chance

A federal judge in Missouri reversed his ruling and gave a St. Peters, Missouri-based silicon wafer manufacturer another chance to argue that a stock-drop lawsuit against it should be thrown out.
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With that ruling, U.S. District Judge Henry Edward Autrey of the U.S. District Court for the Eastern District of Missouri, threw out his March decision rebuffing a dismissal request from MEMC Electronic Material Inc. Autrey gave both sides a chance to file additional legal briefs on the dismissal request as part of the court’s reconsideration.

Autrey said he changed his mind on the issue of whether the 401(k) participants filing the stock-drop action had put forth a sufficiently strong case to overcome the presumption of prudence typically granted to employers offering company stock plans as a retirement savings investment option.

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The court said the March ruling was “gravely in error” because he had lightened the evidentiary burden the plaintiffs would need to carry to survive an initial legal challenge from the employer.

The plaintiffs’ suit alleged the company violated its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by continuing to offer the company stock after it was no longer prudent to do so. The company’s share price was hit hard in mid-2008 after the disclosure of major production problems at two of its plants.

The case is Jones v. MEMC Electronic Material Inc., E.D. Mo., No. 4:08CV1991 HEA.

Products October 20, 2010

Loring Ward Expands IPS Options

Advisers who use Loring Ward for investment management, business management, and practice development will be offered enhanced investment policy statement (IPS) models.
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In addition to the original IPS, independent advisers who work with Loring Ward will now have the following options available to them:

  • An expanded IPS for individual investors, featuring an emphasis on the investment policy statement process and Loring Ward’s Structured Investing philosophy. This is designed for high-net worth investors who want a greater level of detail.
  • An institutional IPS designed specifically to address the complex needs of institutional clients. It provides an in-depth overview of historical market data and the investment policy statement process. It also features an optional appendix on working with the Employee Retirement Income Security Act (ERISA).

“The market volatility of the last few years clearly showed the value of Investment Policy Statements,” said Alex Potts, Chief Executive Officer of Loring Ward. “They helped protect many portfolios from spur-of-the-moment revisions. And they enabled investors to look past the day-to-day noise of markets to what really matters: staying on track towards achieving their long-term goals.”

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