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Managing a Company Stock Fund-When Must an ERISA Fiduciary Sell Employer Stock?

09/29/2010

May the fiduciary of an employee benefit plan covered by the Employee Retirement Income Security Act of 1974 (“ERISA”)  continue to hold and purchase stock of the plan sponsor if the plan sponsor is teetering on the edge of bankruptcy?  May a fiduciary continue to hold and purchase stock of the plan sponsor if management has misstated earnings or engaged in other improper conduct?  If the plan sponsor’s stock simply declines in value significantly, may the fiduciary be held liable for holding on to the stock on the way down?

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