TYLER, Texas - Participants in Electronic Data Systems' $2.4 billion 401(k) plan are suing to rescind their purchase of unregistered company stock.
The employees asked for the refund in an amended complaint filed last month in their 6-month-old class-action suit in U.S. District Court for the Eastern District of Texas, Tyler.
Participants in the Plano, Texas-based company's 401(k) were just told they might have a right to relief. On the same day the amended complaint was filed, EDS' investment and benefits administration committees told participants they might have a right to be refunded their full purchase price on any EDS stock they bought between Dec. 20, 2001, and Nov. 18, 2002. The shares sold during that time might have been unregistered, the committees said. That information was contained in an e-mail sent on May 15 that was obtained by Pensions & Investments.
"EDS is required to register with the Securities and Exchange Commission certain shares of common stock sold to participants and beneficiaries of the plan via the EDS Stock Fund," the e-mail states. "Generally speaking, under federal securities laws, the buyer of unregistered stock ... has a right, for a limited period of time, to rescind the purchase and receive back the consideration (usually money) he or she paid for the stock."
Company spokeswoman Liz Bonet called the sale of unregistered stock "a technical oversight. It's happened to other companies."