Participants in the $1.7 billion Washington Mutual Inc. 401(k) plan filed a class-action lawsuit in U.S. District Court in Seattle, claiming the Seattle banking company failed to adequately monitor the plan and advise participants when investing in company stock was no longer prudent, according to a news release from Hagens Berman Sobol Shapiro, the law firm representing participants. Participants suffered total financial losses in excess of $150 million, the news release said.
Linda Roseborough, manager of retirement benefits for Washington Mutual, did not return two calls by press time.
The suit claims that under ERISA, fiduciaries are obligated to eliminate imprudent investment vehicles from 401(k) plans and to warn plan participants of risky investments. As of Dec. 31, 2006, the plan held $341 million in company stock, which has since had a 60% loss in value.