According to Bloomberg Law, “National Indemnity Co. convinced a federal judge it didn’t breach its duties of prudence and loyalty in offering the Sequoia Fund as an investment option in its 401(k) plan.” The Fund suffered significant losses because of its holdings in Valeant Pharmaceuticals. A prudent process was helpful, and the investment committee was justified in simply relying on publicly available information regarding the fund and Valeant. The Court noted: “the record evidence demonstrates that the committee did not ignore the increased risk of maintaining the Sequoia Fund. Instead, as National Indemnity correctly points out, the Committee monitored Sequoia and the Plan’s other investments by meeting quarterly, reviewing performance evaluation reports from Wells Fargo, and relying on information in the financial press surrounding Valeant and the Sequoia Fund.”
