Coach, Inc Former And Current Employee ERISA Investigation
An investigation on behalf of certain former and current employees of Coach, Inc. (NYSE: COH) concerning potential Employee Retirement Income Security Act (“ERISA”) Breach of Fiduciary Duty was announced.
Coach, Inc has been accused of securities fraud. On Tuesday, April 14, 2009, an investor in Coach, Inc. (NYSE: COH) filed a proposed securities class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Coach, Inc. (NYSE: COH) publicly traded securities during the period between January 23, 2007 and October 22, 2007 against Coach, Inc and certain of its officers and directors over alleged Federal Securities Laws violations. According to the complaint the plaintiff alleges that Coach, Inc and certain of its officers and directors violated the Securities Exchange Act of 1934 by reporting between January 23, 2007 and October 22, 2007, strong growth for Coach, Inc and forecast similar growth going forward, while failing to disclose that its growth rate was, in fact, unsustainable. Then, on October 23, 2007, before the market opened, Coach, Inc announced that although its fiscal first-quarter profit rose 23%, traffic in its U.S. retail stores was weak and Coach expected a slow-down in the coming holiday season. As a result of this announcement, Coach’s stock (NYSE: COH) price dropped $4.87 per share (or 12%) to close at $36.60 per share on October 23, 2007, so the lawsuit.
According to the investigation by a law firm under ERISA employees (former and current) of Coach, Inc. (NYSE: COH) may be eligible to file a ERISA complaint for putting stock options at risk if they can prove their employer violated its fiduciary duty to them. The Fiduciary duty refers to a company’s responsibility to the people who invest in it and if an employer puts the company’s interest ahead of the investors’, it has broken its fiduciary duty., so the investigation. ERISA, so the press release, is a federal law that sets minimum standards for pension and health plans set up by private businesses and ERISA was designed to protect people who participate in employee benefit plans, including employees with stock options in a company.