Fremont workers sue over losses (violating federal pension law)

[Omaha Steve]

Source: LA Times

Fremont workers sue over losses
Employees of the sub-prime lender accuse its board of violating federal pension law.
By E. Scott Reckard, Times Staff Writer
April 26, 2007

Fremont General Corp. employees lost millions of dollars on company stock in their retirement plans when the company was forced out of the troubled sub-prime loan business in March — losses that Fremont's board should have foreseen and prevented, according to a lawsuit alleging violations of federal pension law.

The lawsuit, filed in federal court in Los Angeles this week, contrasts the employees' experience with that of Fremont's board of directors, whom the suit accuses of dumping their own Fremont shares.

Company Chairman James A. McIntyre sold $11 million worth of company stock in August, the suit says, while four other directors sold $5.5 million in stock this year.

Fremont, one of the biggest lenders to high-risk borrowers who can't get traditional bank loans, was forced out of the sub-prime business last month when the Federal Deposit Insurance Corp. accused its Brea-based bank, Fremont Investment & Loan, of making loans that borrowers couldn't repay.

Read more: http://www.latimes.com/business/la-fi-fremont26apr26,1,7518277.story?coll=la-headlines-business