Who stands to win or better yet who stands to lose now that the Supreme Court has unanimously "upheld the right of workers to sue over losses in the 401(k) retirement-savings accounts in some circumstances..."? The Wall Street Journal reported in February 21, 2008 Personal Journal section that the issue in the case before the high court was "whether federal pension law, which allows lawsuits on behalf of a group of employees, also allows an individual to sue over losses in his own account in a 401(k) or similar plan" provided that those that run the plan do not carry out your instructions. The Supreme Court's intent was to (hopefully) head off any possible losses to the plan as a whole.
While this makes a world of sense, to me, this sounds like we are but a few trials away from individuals suing fund/plan managers because the market fell out from under a plan or mutual fund. Then this would ultimately lead to any investor suing another for not buying shares of XYZ Corp. (which would raise stock prices) or sue their broker for not offering advice to buy into Apple Inc. when it was at $5/share (November 28, 1986's closing price).
To me, there is just something fundamentally wrong when people are told to read the prospectus and still complain when things go south. Knowing fully well that "past performance is not an indicator of future results." Rest assured that I am all for catching bad guys when they do something wrong.
I am also sure that there are safeguards built in to this, but what was once thought impossible is now reality. This means that a door that was once thought locked is now left wide open for people to cry foul then of course there will always be someone who will cry a little louder than the rest. Unfortunately, he will be heard and he will win, but at what price?
And that's why I buy low and sell high...at my own risk.
let's tag this blog post with:
Dave Guerra, 401k, Supreme Court, Wall Street Journal, Fund Managers, Apple, XYZ Corp
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