Today the Supreme Court heard oral argument in LaRue v. DeWolff Boberg. Here's a link to a report from Bloomberg.com to give you the background. If you're really interested, links to the briefs of the parties can be found here. And the transcript of the argument is also available.
The LaRue case is a big deal in the world of employment law. It will affect the rights of every participant in a 401(k) plan. There are millions of them (and you know who you are). It presents the question whether a participant can sue a plan fiduciary for losses sustained in individual accounts due to mismanagement by the fiduciary. Consider the facts, which are simple. Mr. LaRue participated in his company's 401(k) plan. DeWolff Boberg was the fiduciary. Fearing a market decline, LaRue twice asked DeWolff to sell his riskier investments and reinvest the money in safer bond investments. DeWolff failed to sell as requested, and LaRue sustained a loss of around $150,000. LaRue sued, but the lower courts dismissed his complaint on the theory that he could not sue the plan fiduciary for losses to his individual account.
The Supreme Court will now decide whether individuals who sustain losses at the hands of fiduciaries can sue to recover their money.