Stull, Stull & Brody Launches Two Stock-Drop Investigations

Stull, Stull & Brody has announced that it has commenced an investigation relating to the 401(k) defined contribution retirement plans of MBIA Inc. and the 401(k) defined contribution retirement plans of International Game Technology. 

Regarding the MBIA investigation, Stull, Stull & Brody said it is investigating, among other things, “whether fiduciaries of the MBIA 401(k) plan may have violated the Employee Retirement Income Security Act of 1974 (ERISA)”.The law firm claims that a violation may have occurred by MBIA “failing to disclose the Company’s true operating condition to participants and beneficiaries of the plans,” and that it continued to offer MBIA stock as an investment option in the plans “when it was not prudent to do so, and/or by allowing an imprudent overconcentration of Company stock in the Company’s 401(k) plans.” 

The latter point seems to be a new angle in these so-called “stock-drop” cases, which draw their name from the triggering event of a sudden drop in the price of the stock in question.

IGT Investigation

Stull, Stull & Brody also said it is investigating whether fiduciaries of the IGT 401(k) plan might have violated the ERISA by failing to disclose the company’s true operating condition to participants and beneficiaries of the plans.Similarly, the firms said that that failure to disclose, coupled with “offering IGT stock as an investment option under the plans when it was not prudent to do so, and/or by allowing an imprudent overconcentration of company stock in the Company’s 401(k) plans” might have constituted a fiduciary breach.

The firm is reaching out to anyone who held MBIA stock in an individual account under any of the company’s 401(k) plans at any time since January 1, 2007, and anyone who held IGT stock in an individual account under any of the company’s 401(k) plans at any time since January 1, 2008.