From Reuters: “Northern Trust Pension Suit an Eye-Opener.” The article quotes Eli Gottesdiener, a lawyer representing Enron employees, as saying that the decision made clear the responsibly that trustees have in protecting pension funds, even if they are told what to do by the companies that employ them. “This is huge in terms of precedent,” he said. “It establishes that even directed trustees have fiduciary obligations and cannot blindly follow orders.”
Additional Quote of Note: “The court’s decision could put more of an onus on trustees, said Scott Henderson, a lawyer who specializes in investment management and matters of pension funds for Boston-based law firm Bingham McCutchen LLP. While directed trustees have no discretion on investments, Henderson said they might have to start assessing the risk of including company stock in pension investments. “Pension funds are already nervous about the role company stock plays in their investment line-up,” he said. “Now they could be responsible for assessing the quality of company stock.”
Links to the Enron case and other articles at this previous post today.
Lyle Roberts at the 10b-5 Daily blog has a post on the Enron case as well.