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Compliance January 28, 2010
Law Firm Probes Potential Motorola Stock Drop Case
A Pennsylvania law firm has announced it is investigating potential claims against Motorola Inc. in regards to company stock in its 401(k) plan and employee stock purchase plan.
Reported by Fred Schneyer
The Law Offices of Howard G. Smith allege the company misrepresented sales prospects for its RAZR2 phones and that the release of inaccurate information caused a nearly 19% price drop in its shares.
A company news release said it is trying to find out whether Motorola violated the Employee Retirement Income Security Act (ERISA) by continuing to offer company stock as part of the Motorola 401(k) plan or its employee stock purchase plan of 1999 after it was no longer prudent to do so.
The firm claims that the share price decline took place in January 2008 after Motorola disclosed its problems with its RAZR2 sales and that the decline caused participants to lose money.