In ERISA stock-drop class actions, plaintiffs routinely allege that their employers breached a duty of prudence by permitting employees to invest their retirement assets in their company’s stock. Until today, defendants typically defended against such claims by invoking a judicially crafted presumption that offering company stock was prudent. Today, in Fifth Third Bancorp v. Dudenhoeffer, No. 12-751 (pdf), the Supreme Court rejected that presumption.
But all hope is not lost for stock-drop defendants. Much of the work previously done by the presumption of prudence will now be done by the substantive requirements of the duty of prudence. The Court
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