Adele Varga seeks to hold GE and former chief executive Jeffrey Immelt liable under federal benefits law for keeping the insurance problem secret and allegedly causing stock price to be artificially inflated.
This was a fiduciary breach under the Employee Retirement Income Security Act because the company continued allowing workers to invest retirement savings in GE stock despite knowing it was overvalued, the suit claims. The suit was filed Dec. 14, and docketed Dec. 18.
More than 223,000 people have money invested in GE’s retirement plan, the complaint claims.
The lawsuit follows GE’s January revelation that it still carried billions of dollars in liability in connection with its long-term care insurance business, which was largely sold off in 2004. The news also prompted a Securities and Exchange Commission investigation into GE’s insurance practices.
This is the second time GE has been sued under ERISA over how its insurance liabilities affected stock price. A proposed class action filed in 2006 ultimately settled for $10.15 million, and required structural changes to GE’s retirement plan.
GE didn’t immediately respond to requests for comment.
The case was filed in the U.S. District Court for the Northern District of New York by Simmons Hanly Conroy LLC, Crueger Dickinson LLC, and Wagstaff & Cartmell LLP.
The case is Varga v. Gen. Elec. Co., N.D.N.Y., No. 1:18-cv-01449-GLS-DJS, complaint 12/14/18.
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(Updated with GE's response.)