State Street confident in Delphi pension case
US – State Street Corp. is confident going into a court case brought against it by Delphi Corp. employees who claim the bank lost millions of dollars from their pension plan.
Staff of the bankrupt auto components maker are suing the Boston-based group claiming it lost them millions when, as plan administrator, it delayed selling Delphi stock while the company fell into bankruptcy.
"State Street fulfilled its obligations under ERISA on behalf of the Delphi Stock Fund participants,” a spokeswoman said, referring to the Employee Retirement Income Security Act. “We will confidently defend our position in court."
Even after Delphi announced it was reviewing its accounting practices and that it would have to restate earnings, State Street failed to sell the company’s stock or diversify the portfolio, according to a consolidated class action complaint filed on March 3.
State Street didn't start selling Delphi shares until three days before the company filed for bankruptcy in October, the complaint said.
"They did so despite the fact there were numerous red flags pointing to the company's likely inability to service its debt based on historical and anticipated cash flows and despite the fact that the stock was no longer a prudent investment," the Delphi workers said in the complaint cited by Bloomberg News.