On March 12th, participants in the First Federal Bank of California Employee Stock Ownership Plan moved the United States District Court for the Central District of California for final approval of an $800,000 settlement agreement that would end a class action brought against former officers and directors alleging breaches of fiduciary duties under ERISA. Participants alleged the defendants breached their fiduciary duties of prudence, care, and loyalty through their management, oversight, and administration of the plan's significant investment in employer securities during the class period. Specifically, the participants alleged the bank had a substantial portfolio of residential pay option adjustable rate mortgages that were toxic and significantly underperforming and that the bank lowered its mortgage underwriting standards relating to the verification of income and assets.
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