How would you like to be an employee of a monoline, and being required to invest your 401(k) in company stock? Apparently that’s exactly what MBIA required its employees to do — and now they are suing in an ERISA class action:
The same issue exists for the subprime lenders. Are they requiring their employees to invest their retirement funds in company stock (while the company officers and directors dump the stock)? Here is one example of a retiree of Freemont alleging just that in a recent (and still pending) lawsuit:
But isn’t this a bit Enron-ish? Query: even if these employees/retirees “win” these cases, where is the money going to come from to pay a judgment? As a practical matter, there may be no good remedy to make them whole.