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Real-Life Examples of ERISA Violations

January 19, 2016 Blog

The Employee Retirement Income Security Act (ERISA) protects employees who invest their retirement savings through their employers. Among its many requirements, ERISA requires all employers to act in their employees’ best interests when managing their 401(k) accounts, pensions and other retirement assets.

At Zamansky LLC, we regularly investigate ERISA violations, and we have helped employee-investors across the country recover millions of dollars in investment losses. The following are some real-life examples of actual or apparent ERISA violations that have given rise to claims for financial compensation.

CEO’s Termination Leads to Fall in Stock Price

In December 2014, a former Sanofi employee filed a whistleblower lawsuit alleging that the company’s CEO, Christopher Viehbacher, and other top executives had participated in a scheme to offer illegal kickbacks to doctors and hospitals. When Sanofi fired Mr. Viehbacher, the company’s share price dropped by 20 percent – resulting in significant losses for employees who owned Sanofi stock through its U.S. Group Savings Plan.

We are currently conducting an investigation into whether Sanofi continued to invest employees’ retirement funds in company stock despite knowing of the risk of a drop in value. If so, employees who suffered losses may be entitled to compensation under ERISA.

Company Announces $580 Million Loss of Value After Acquisition

In a similar type of situation, we investigated Caterpillar for possible ERISA violations when it announced that it was taking a $580 million write-off due to accounting misconduct at a company it had acquired just months prior to the announcement. Caterpillar continued to invest employees’ 401(k) assets in its stock between the time of the acquisition and the announcement – which caused its stock price to fall by $0.87 per share.

Similar to the Sanofi case, our investigation focused on whether Caterpillar failed to take necessary steps to protect its employees’ best interests – a clear violation of ERISA.

Employers Fail to Halt Employee Investments in Company Shares Despite Significant Losses

While the Sanofi and Caterpillar cases involved major one-time events, companies can face liability under ERISA any time they fail to take prudent action to protect their employees’ investments.

For example, we have also investigated several large companies – including Best Buy, RadioShack and Sears – for continuing to invest their employees’ retirement funds in company stock despite clear indications that their shares would lose significant value. In the case of RadioShack, some employees lost as much as 80 percent of their investments when the company’s shares fell from $20 to $3 over the course of approximately three years.

In this type of situation, companies often continue investing employees’ retirement assets in their stock in order to avoid the appearance that tough times may be on the horizon. Of course, this is exactly the type of information that these companies are supposed to use to protect their workers.

If you have suffered losses in your retirement account and you think that your employer’s or plan manager’s failure to act in your best interests may be to blame, we encourage you to contact us so that we can conduct an investigation.

Speak With an ERISA Lawyer at Zamansky LLC Today

At Zamansky LLC, our lawyers have been helping individuals protect their rights under ERISA for more than 30 years. To find out if you have a claim, call (212) 742-1414 or contact us online to request a free consultation today.

Client Reviews

“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

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