Law360 (February 2, 2023, 10:45 PM EST) — A Second Circuit panel appeared skeptical Thursday of a group of financial services companies’ push to send a proposed class action accusing them of overcharging an employee stock ownership plan into individual arbitration, though judges disagreed over how a recent U.S. Supreme Court decision should apply to the case.
A three-judge panel heard oral arguments in an appeal led by ESOP plan trustee Argent Trust Co., which faces allegations from ex-workers at Strategic Financial Solutions that Strategic, Argent, senior executives and their companies collectively cost retirement plan participants millions when they overcharged the ESOP in a $242 million sale of company stock. The lawsuit, led by former call center employee Ramon Dejesus Cedeno, was first filed in November 2020 and alleges the sale constituted a prohibited transaction in violation of the Employee Retirement Income Security Act. . . .
Following arguments, an attorney for the participants, John Stokes, said in a statement, “We were pleased with how the argument went today and are optimistic the court will agree with us that defendants cannot use an arbitration clause to rewrite the statute Congress enacted.” . . .
Ramon Dejesus Cedeno and the participants are represented by Tillman J. Breckenridge, Rachana Pathak, John Stokes and Peter K. Stris of Stris & Maher LLP and Ryan T. Jenny and Gregory Y. Porter of Bailey & Glasser LLP. . . .
The case is Dejesus Cedeno et al. v. Argent Trust Co. et al., case number 21-2891, in the U.S. Court of Appeals for the Second Circuit.
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