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401(k)’s: Another Lesson from Enron

Posted by Frank Steinberg | Jul 26, 2006 | 0 Comments

An article out today reports on the final settlement of litigation between former Enron employees and Northern Trust, a well-known money management firm. A federal judge approved a $37.5 million settlement, “which brings to $264.3 million the total amount collected on behalf of former Enron employees who had 401(k) plans with company stock.” The court also approved the payment of about $24 million in legal fees and related expenses.

The employees had charged that Northern Trust failed to adequately diversify their 401(k) investment portfolios, which were hit hard when Enron stock crashed.

The old chestnut that investments should be diversified is advice that should be heeded by investors who put their money into 401(k)'s, employers who sponsor them, and money managers who manage them.

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...


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