Supreme Court Decides Not to Hear Lehman Brothers Stock Drop Case

After a long road through federal courts, a suit brought by participants in the Lehman Brothers ESOP was not granted a hearing by the U.S. Supreme Court. The plaintiffs argued that the plan's fiduciaries had failed to provide sufficient information to plan participants about the company's health. Lehman Brothers went bankrupt in September 2008, leaving the company stock in the ESOP worthless. The plaintiffs lost in district court and the Second Circuit Court of Appeals, but the Supreme Court's June 2014 decision in FifthThird Bancorp v Dudenhoeffer eliminated the so-called presumption of prudence on which the two lower courts had relied. The Supreme Court vacated the Second Circuit's ruling and remanded the case to the district court, which again found against the plaintiffs. The Second Circuit agreed, and with its decision not to review the case, the Supreme Court is allowing that decision to stand.