After five years and two trips to the U.S. Supreme Court, the stock-drop case against fiduciaries of an IBM 401(k) plan has been tentatively settled.
Attorneys for IBM fiduciaries and for plan participants reported the agreement in a letter Monday to U.S. District Judge William H. Pauley III.
No terms were announced. The joint letter said preliminary terms will be submitted to the court March 8 in the case of Jander et al. vs. Retirement Plans Committee of IBM et al.
The initial complaint, filed in 2015, said plan fiduciaries should have taken corrective action because 401(k) plan investors in company stock were harmed when the stock fell following IBM's disclosure, asset write-down and subsequent sale of a money-losing microelectronics unit.
Mr. Pauley dismissed the complaint in September 2016 and again in September 2017. However, a three-judge panel for the 2nd U.S. Circuit Court of Appeals reversed the lower court ruling in December 2018.
IBM then petitioned the U.S. Supreme Court for review. In January 2020, the justices vacated and remanded the case back to the appeals court with instructions to address issues that hadn't been part of the lower court rulings.
The appeals court in June 2020 issued a unanimous, unsigned opinion reaffirming its original pro-plaintiff ruling. "To the extent that the arguments were previously considered, we will not revisit them," the judges wrote. "To the extent that they were not properly raised, they have been forfeited, and we decline to entertain them."
In September, IBM fiduciaries again petitioned the Supreme Court, but the justices in November declined to review the case.
The high court response put the complaint back in Mr. Pauley's court with the instructions that had been issued by the appeals court, stating that the plaintiffs had provided sufficient information under ERISA and a previous U.S. Supreme Court ruling to allow the case to go to trial.