Eaton Corporation Former Employee ERISA Investigation

If you a former or current employee or are a member of any of Eaton’s investment plans or profit sharing retirement plans and purchased or held Eaton Corporation (NYSE:ETN) shares or have information relating to this investigation, you should contact the Shareholders Foundation, Inc.

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An investor in shares of Eaton Corporation (NYSE:ETN) has filed a lawsuit against certain directors and officers of Eaton Corp. over alleged breaches of fiduciary duties. Meanwhile an investigation on behalf of former and current employees of Eaton Corporation (NYSE:ETN) concerning a potential Employee Retirement Income Security Act (“ERISA”) Breach of Fiduciary Duty was announced.

According to the complaint the plaintiff alleges that the conduct of the defendants has resulted in Eaton Corp. having to unnecessarily forfeit the recovery of valuable corporate assets due to sanctions related to a lawsuit initiated as a result of the theft of trade secrets estimated to have a value to the company of up to $1billion.
According to an investigation by a law firm under ERISA employees (former and current) of Eaton Corporation (NYSE:ETN) 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 plaintiff in the above mentioned lawsuit against certain directors claims that back in 2002 six employees left Eaton Corp to join competitor Frisby Aerospace and without authorization, these employees wrongfully took thousands of pages of documents containing trade secrets and proprietary information relating to hydraulic pumps, motors and other products developed by Eaton Corp.
Subsequently in 2004 Eaton Corp filed a lawsuit against Frisby Aerospace and the former Eaton Corp. employees alleging theft and conspiracy. Consecutively Eaton Corporation received between 2004 and late 2006 a series of unfavorable rulings from the judge presiding over the trade secret litigation. Then in late 2006 Eaton Corp. retained an attorney to work on behalf of the company. As it turned out, so the plaintiff, the attorney did not enter an appearance in the litigation and his involvement was kept secret from Frisby Aerospace and its counsel. Nevertheless, so the plaintiff, this attorney became involved on behalf of Eaton Corp and the judge’s rulings turned in favor of Eaton Corp.
By late January 2008, so the plaintiff, it was publicly reported that an investigation into the relationship between this attorney and judge was being widened to encompass possible improprieties in the lawsuit by Eaton Corp against Frisby Aerospace. The judge eventually recused himself from that litigation and a new judge was assigned, who determined and ruled that Eaton Corp had retained the attorney to improperly influence the former presiding judge.
The plaintiff alleges that certain officers directly participated in the attorney’s improper contracts with the former presiding judge and certain directors either consciously knew of the certain officers’ improper involvement of the attorney and failed to stop it, or they knowingly abdicated their fiduciary duties.