Lawsuit Claiming Secret Stock Plan Dilution Heads Toward Trial

Former employees of Technical Associates of Georgia can go to trial in their class action saying top executives secretly wrested a 40% ownership stake in the engineering and technical services company away from its employee stock ownership plan.

The lawsuit claims top executives at Technical Associates secretly created new stock in the company in 2011, then kept it for themselves. This diluted the employee stock plan’s ownership stake—from nearly 100% to about 60%—and siphoned dividends from workers in violation of the Employee Retirement Income Security Act, the plaintiffs say.

A trial is needed to determine whether certain executive defendants were ...