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Compliance July 25, 2013
Retirement Plan Investigated for Alleged ERISA Violations
A law firm is investigating whether RadioShack Corporation violated the Employee Retirement Income Security Act (ERISA) by offering company stock in its retirement plan.
Reported by Kevin McGuinness
Zamansky LLC—a law firm specializing in securities class actions, securities arbitration and litigation over stock broker fraud—is investigating RadioShack Corporation’s Employee Retirement and 401(k) Plan and whether there were ERISA violations connected with it. A statement from the law firm says, “ERISA imposes fiduciary duties on companies to prudently manage and invest plan assets, including offerings of company stock, and to disclose material facts to plan participants.”
On July 11, 2013, Reuters reported that RadioShack’s share price fell on news that it was considering hiring a financial adviser to assist with restructuring its balance sheet. RadioShack employees who invested in stock under the company’s retirement plan expressed concern that they have invested imprudently, according to ERISA attorney Jake Zamansky.
The law firm noted that on July 24, 2012, a securities fraud class action lawsuit was filed against the company, as Fidel v. RadioShack Corporation, in the U.S. District Court for the Southern District of New York (No. 12-CV-58255). The suit alleges that management made material misrepresentations about the company’s earnings.