Compliance July 2, 2010

Scott+Scott Announces BP 401(k) Plan Investigation

Another law firm has launched an investigation into possible violations of the Employee Retirement Income Security Act by BP PLC and fiduciaries of the its Employee Savings Plan.
Reported by

Specifically, Scott+Scott is investigating whether the fiduciaries for the BP 401(k) plan breached their fiduciary duties by continuing to offer and invest BP stock in the 401(k) plan when it was no longer prudent to do so.   

The firm’s announcement noted that following BP’s Deepwater Horizon drilling rig explosion, allegations emerged that BP cut costs and corners at the expense of personal and environmental safety. The consequences of this behavior may have negatively impacted the retirement savings of BP’s 401(k) participants.   

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The firm said it is investigating whether the fiduciaries of the 401(k) plan knew or should have known of BP’s cost cutting and safety record, including the conduct that led up to the Deepwater Horizon explosion.   

More information is at http://www.scott-scott.com/.   

Since the oil rig explosion, a number of firms have announced investigations into the 401(k) plan (see Lanier Law Firm Investigating BP 401(k)), and two participant lawsuits have already been filed (see FL Woman Sues BP Over 401(k) Stock Losses, Ex-Employee Sues BP Over Plan Losses).  

Products July 2, 2010

S&P Unveils CDS Indexes

 Standard & Poor's has launched a series of credit default swap sector indexes. 
Reported by

A news release said the S&P CDS Sector Indices seek to track the credit default swap market for a select number of corporate credits in distinct Global Industry Classification Standard (GICS) sectors and sub industries. 

The S&P CDS Sector Indices are designed to reflect the credit default swap market for a sector of corporate credits, increasing transparency for market participants. The Indices may be country specific or global in nature and will cover a distinct industry segment. They offer the independence of the S&P CDS Index Committee and third-party pricing, the news release said.  

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Each index is designed with a focus on liquidity with the goal of supporting investment products such as index funds, index portfolios, and index futures and options. Each series of the S&P CDS Sector Indices has a 5 1/4 year maturity as measured from its effective date.  

The S&P CDS U.S. Sector Indices are equal weighted, with a given number of reference entities and a fixed coupon. Index levels and average CDS spreads for each index are published daily. 

More information is at www.fixedincomeindices.standardandpoors.com.

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