Fiduciary Focus #1 of 3: Conduct not Outcome
The most successful Class Actions under the Employee Retirement Income Security Act of 1974 (ERISA) against Employer Sponsored Plan Fiduciaries will uncover behaviors that are detrimental to the participants of the plan. Behaviors, not products or product outcomes.
If, under ERISA or Trust Law, Fiduciaries must act solely in the interest of participants then there must be visible evidence of loyalty and prudence. Only by examining the conduct and methodology of the Fiduciaries can it be determined whose interests were paramount and if a breach of duty has occurred. Once a behavior is suspect it, perhaps, is better to investigate possible causation based on the visible evidence or lack thereof. Walking through “the valley” of causation, is not a journey that a CPA or Attorney should be embarking on alone. They have little experience in the proper conduct and methodologies required to complete the journey.
Outcome may foster presumptions of prudence. Conduct and allegations supporting propositions MUST appear in the complaint.
Next two blogs:
Fiduciary Drift: Content
Fiduciary Drift: Oversight