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Bear Stearns Employees 401ks Bear bad news – Dont make the same mistake

Bear Stearns employees 401k’s were literally loaded with Bear Stearns stock apparently. Here is one blurb about it from Report on Business:

Hot on their heels will likely come lawsuits on behalf of Bear Stearns’ employees. What makes this case interesting is the unusually high level of stock ownership by staff, who hold more than a third of the company’s shares, said Ross Intelisano, a partner at Rich & Intelisano LLP, which specializes in securities litigation.

“We’ve been getting a lot of calls,” said Mr. Intelisano, whose firm has represented employees in other cases against Bear Stearns. “The question would be whether or not Bear, as the administrator of the 401(k) plan, breached its fiduciary duties to the employees.”

A 401(k) in the United States is an employer-sponsored, defined-contribution retirement plan, and many Bear Stearns employees have company stock in their plans.

After doing a little more digging it seems that the major default investment for Bear Stearn’s employees 401k’s was Bear Stearns stock itself.  Does that scare anyone else a little bit?  Honestly, is this Deja Vu?  Enron anyone?

As of right now 14,000+ Bear Stearns employees not only are out of a job, but have worthless 401ks as well… Lets just lay it out there: your livelihood is already tied to your employer, do not tie your retirement funds to it as well, at least, not in great quantity.

Always diversify my friends, ALWAYS.

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