Justices Appear Divided on Framing of IBM 401(k) Stock Case (1)

A battle over the company stock in International Business Machines Corp.’s 401(k) plan led the justices of the U.S. Supreme Court to grapple with how federal securities law interacts with ERISA—though not all justices appeared to welcome the discussion.

“This is a securities law complaint,” Paul D. Clement, the Kirkland & Ellis partner who argued on behalf of the IBM defendants, told the justices.

The case asks whether IBM insiders can be liable under the Employee Retirement Income Security Act for failing to promptly disclose struggles in the company’s microelectronics division that led to a 7% drop in stock ...