The Seventh Circuit completely embraces Moench presumption of fiduciary prudence in efficient market fiduciary stock-drop cases

The Seventh Circuit case of White v. Marshall & Ilsley Corp (M&I) is one in an ongoing series of cases where plaintiffs have alleged that fiduciaries of employee individual account plans (EIAP) or employee stock option plans (ESOP) have acted imprudently by investing in the employer's stock during periods of significant declining market share prices. The savings plans in these cases are governed by the Employee Retirement Income Security Act (ERISA) and the plaintiffs generally contend that the plan fiduciaries violated this federal statute by continuing to offer employer stock as a plan investment option when they knew or should have known that the declining stock price made the stock an imprudent investment alternative. Plaintiffs' primary argument rested on how much responsibility, discretion, and the authority that ESOP managers have pursuant to ERISA in reacting to conditions which adversely impact the performance of the ESOP stock.