Employees can become investors in the companies they work for by virtue of owning company stock in retirement plans or pension plans administered by the company.

These plans are subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) enacted to protect the interests of employee benefit plan participants and their beneficiaries. ERISA is a federal law that generally requires the disclosure of financial and other information concerning the plan; establishes standards of conduct for plan administrators; and provides remedies and legal recourse.

Legal recourse includes litigation, and related recovery of investment loss due to the misconduct by the plan administrator or other fiduciaries.

An example of investor claims brought by company employees includes the Enron fraud, in which a class action suit was brought by 24,000 employees against Enron, and Enron’s Investment Bankers, Enron’s corporate attorneys, and Enron’s outside accounting firm. The Enron ERISA litigation produced $220 million in settlements for the benefit of former Enron employees.