A U.S. federal judge on Friday dismissed a lawsuit by former Lehman Brothers employees seeking to hold onetime CEO Richard Fuld liable for their retirement plan losses as the Wall Street bank plunged into its 2008 bankruptcy.
Reuters reports that U.S. District Judge Lewis Kaplan in Manhattan rejected claims that Fuld breached an obligation to share what he knew about Lehman's fast-deteriorating finances with officials who oversaw the plan, where Lehman stock was an investment option.
The judge also rejected claims that those officials breached their fiduciary duty to employees by letting them invest in Lehman stock, resulting in millions of dollars of losses.
Investors said the officials ignored mounting public concern about Lehman's health, failed to explore whether hidden risks made the stock unsafe, and did not consider whether 'special' circumstances, including a regulatory ban on short sales of large bank stocks, made the share price unreliable.
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