Posted in: Compliance/Legislation, In this week's e-newletter, Insurance/Annuities, Latest News & Views
Letting employees invest in company stock when it’s a risky investment can land a company in hot water.
Nortel Networks, Inc., learned that lesson the hard way. It just settled an ERISA (Employee Retirement Income Security Act) lawsuit for $21.5 million.
Nortel allegedly offered employees their own company stock as an investment option in a company benefits plan. But it didn’t let employees know about the risks involved.
The company was in financial trouble and filed for Chapter 11 bankruptcy in 2009. It sold its businesses instead of restructuring.