More judges are rejecting lawsuits charging that 401(k)s that offer company shares without warning employees of the risks of investing in company stock, on the reasoning that the losses of a few investors cannot be blamed on an entire retirement plan, The Wall Street Journal reports.

With the number of lawsuits against 401(k)s citing breach of fiduciary duty on the rise, the findings could affect many investors.

Recently, the Third U.S. Circuit Court of Appeals ruled that employees could sue Schering-Plough for mismanagement of its 401(k)s. However, a New York court said that employees could not sue JPMorgan Chase, and the Fifth U.S. Circuit Court of Appeals said employees at AMR couldn't sue their company, either. The reason in both cases was that not all employees in the 401(k) plan were adversely affected by an offering or the lack of a warning.

"At the moment, everybody is living in a real world of uncertainty," said Myron D. Rumeld, head of the Erisa litigation group at Proskauer Rose.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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