An Employee Stock Ownership Plan (“ESOP”) is a type of qualified retirement plan that provides employees with ownership interest in their company through shares of stock. The purpose of an ESOP is to align employee interests with those of the company, since its employees are also stockholders. Through an ESOP, employees can either purchase stock from their employer or receive…
The New York Law Journal is reporting that investors in the Chinese company Tencent Music Entertainment Group have sued Goldman Sachs Group Inc. and Morgan Stanley, accusing the investment banks of using insider information to dump shares of the firm in March. The lawsuit, filed last week in Manhattan federal court, named both Goldman and Morgan Stanley over a massive stock sell-off…
So-called defined contribution plans—such as 401(k) plans—have become “the primary private savings vehicle for most Americans’ retirement.”[1] The assets held by 401(k) plans have more than doubled over the past decade, and as of 2019, these plans held a whopping $6.4 trillion in retirement savings.[2] With trillions at issue and the retirement security of millions of American workers at stake, it is…
The U.S. Department of Labor (“DOL”) recently issued a guidance document explaining that 401(k) plans are permitted to invest in private equity funds, albeit only indirectly.[1] The DOL touts its new guidance as a policy that “level[s] the playing field for ordinary investors” and helps “ensure that ordinary people investing for retirement have the opportunities they need for a secure retirement.”[2] However,…
Financial Advisor Scams More than 650,000 registered financial advisors in the United States help manage more than $30 trillion of investible assets. A recent study “The Market for Financial Adviser Misconduct” found that financial advisor misconduct is broader than many realize – 12% of the financial advisors in the United States have disclosure records and 7% have been disciplined for misconduct and/or…
Participants in their company’s 401(k) plan have come to expect that their employer will protect their personal information from disclosure outside the plan. However, plan participants of Shell Oil’s 401(k) have filed a case in federal court in Galveston, Texas – Harmon v. Shell Oil Company – alleging Shell took no action to stop the plan’s recordkeeper, Fidelity, from using participants’ personal…
401(k) documents are notoriously mystifying—and notoriously ignored. “I must say,” admitted Justice Ruth Bader Ginsburg at recent oral argument of the United States Supreme Court, “I don’t read all the mailings that I get about my investments.” For about 72 million American workers, 401(k)s are “nest eggs.” Employees expect their 401(k) investments, along with social security, to provide them with a steady income during…
No doubt you have seen the news recently about the stock market gyrations caused by the uncertainties arising from Covid-19. Because many Americans’ retirement savings are invested directly and indirectly in the stock market, now may be the time to evaluate how your 401(k) is holding up through this market volatility. Foremost, a fund that has lost value in this…
“Crypto crime”—that is, a crime involving cryptocurrencies and other digital assets, including...
Typically, stockbrokers earn commissions each time an investor enters a securities order to buy stock or sell stock. Full-service stockbrokers earn higher commissions than online stockbrokers because, unlike online stockbrokers, full-service stockbrokers provide investors with the added service of advising you when to buy, sell or hold particular investments. Because stockbrokers are paid on commission, there is an inherent conflict…