Participants and beneficiaries of the MBNA Corporation 401k Plus Savings Plan have brought an Employee Retirement Income Security Act of 1974 (ERISA) class-action suit against MBNA for alleged breach of fiduciary duties, with Wolf Haldenstein Adler Freeman & Herz LLP of New York handling the case, to be heard before the United States District Court for the District of Delaware.The case, Cannon v. MBNA, also names some of the company's officers and directors, its pension and 401(k) plan committee, Dwight Asset Management Company, along with the plan's investment manager.
According to the plaintiff, the company and the other defendants breached their fiduciary obligations by offering, purchasing, holding, and monitoring MBNA stock for the portfolio, between Jan. 7 through April 20 of this year. The suit charges the company with offering its own company stock through the plan inappropriately.
The defendants are accused of falsifying the company's earnings growth during the period, along with interest-only strips receivables, and other conditions representing the company's real standings. This, in addition to some of the company's violations of Generally Accepted Accounting Principles (GAAP), contributed to the artificially high price of the MBNA's shares, the lawsuit charges.