Does this story mean I can sue the companies my 401(k) invested in because they lost money?That was the question I posed to BizzyBlogger Tom Blumer about an hour ago. His answer was rather interesting so I asked him if I could share it with you. Here it is:
No, but the mutual funds that had TWC in their portfolio and the plan sponsors like those indicated can. Then (in theory) they should spread the settlement back to individual fund investors in some way.Seems to me that only a lawyer of Marc Dann's "caliber" could come up with a "scheme" like this... I've always thought that an investment was a risk that a party could take...I had no idea one could sue if the company's stock lost value for any reason, let alone a decision to merge with another company.
If they inflated subscriber accounts and revenues they deserve a hosing.
Your fundamental question could be answered yes, if:
- the company/sponsor heavily biases its investment selection towards its own stock (rare since Enron).
- the company/sponsor doesn't do enough documented work to prudently select funds.
- the company/sponsor doesn't monitor the funds' performance.
- the company/sponsor does something else breaching a fiduciary duty (i.e., relying on financial planner to do the investing for them only to find out the financial planner ran off with the money, which has happened in a few smaller plans).
Learn something new every day around here...
