Opinion ID: 615595
Heading Depth: 2
Heading Rank: 1

Heading: Evidence Claim

Text: The majority affirms the District Court's dismissal of plaintiffs' Prudence Claim, in which plaintiffs allege (a) that the Investment Committee, the Administration Committee, Citigroup, and Citibank knew or should have known that Citigroup stock was an imprudent investment; and (b) that the foregoing defendants thus breached their fiduciary duties by, among other things, continuing to offer as an investment option the Citigroup Common Stock Fund (the Fund), which consisted mostly of Citigroup common stock. I conclude that plaintiffs' allegations are sufficient to state a claim against the Investment and Administration Committees for breach of the duty of prudence. I thus respectfully dissent.
The District Court concluded that defendants, in offering the Fund to Plan participants as an investment option, were entitled to a presumption that they did so prudently. In re Citigroup ERISA Litig., No. 07 Civ. 9790, 2009 WL 2762708, at , 15-19 (S.D.N.Y. Aug. 31, 2009). By upholding this ruling, the majority aligns our Court with those that have embraced the doctrine articulated in Moench v. Robertson, 62 F.3d 553, 571 (3d Cir.1995), cert. denied, 516 U.S. 1115, 116 S.Ct. 917, 133 L.Ed.2d 847 (1996). See, e.g., Quan v. Computer Scis. Corp., 623 F.3d 870, 881 (9th Cir.2010); Kirschbaum v. Reliant Energy, Inc., 526 F.3d 243, 254 (5th Cir.2008); Kuper v. Iovenko, 66 F.3d 1447, 1459 (6th Cir.1995). Because I find the underpinnings of the Moench presumption to be fundamentally unsound, I decline the invitation to adopt it as a rule of law in our Circuit. As a practical matter, Moench -type deference to the investment decisions of an ESOP fiduciary renders moot ERISA's prudent man standard of conduct, 29 U.S.C. § 1104(a)(1). Of course, policy concerns sometimes justify divergence between standards of conductin other words, how actors should conduct themselvesand standards of reviewin other words, the manner in which courts evaluate whether challenged conduct gives rise to liability. But in my view, the policy concerns underlying the Moench decision warrant no such divergence. I would preserve the statutorily mandated standard of prudence by calling for plenary, rather than deferential, review of an ESOP fiduciary's investment decisions.
ERISA was designed to ensure the continued well-being and security of millions of employees and their dependents through the regulation of employee benefit plans. See 29 U.S.C. § 1001(a). See also Varity Corp. v. Howe, 516 U.S. 489, 496, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). The statute thus imposes stringent standards of conduct upon fiduciaries who oversee such plans. See 29 U.S.C. § 1001(b). Indeed, we have said that ERISA's fiduciary standards of conduct are `the highest known to the law.' LaScala v. Scrufari, 479 F.3d 213, 219 (2d Cir.2007) (quoting Donovan v. Bierwirth, 680 F.2d 263, 272 n. 8 (2d Cir.), cert. denied, 459 U.S. 1069, 103 S.Ct. 488, 74 L.Ed.2d 631 (1982)). Of particular relevance here is the ERISA fiduciary's duty to act in accordance with the prudent man standard of conductthat is, with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. 29 U.S.C. § 1104(a)(1)(B). Although this standard is rooted in the common law of trusts, ERISA's standard is more exacting. Donovan v. Mazzola, 716 F.2d 1226, 1231 (9th Cir.1983). ERISA allows for the creation of ESOPs, which are designed to invest primarily in qualifying employer securities. 29 U.S.C. § 1107(d)(6)(A). To fulfill this purpose, ESOP fiduciaries are exempt from certain standards of conduct that apply to other kinds of ERISA plans. For example, although fiduciaries of pension benefit plans generally must diversify investments so as to minimize risk, see id. § 1104(a)(1)(C), ESOP fiduciaries need not do so. Specifically, section 404(a)(2) of ERISA provides that the diversification requirement ... and the prudence requirement (only to the extent that it requires diversification) ... is not violated by acquisition or holding of ... qualifying employer securities. Id. § 1104(a)(2). ESOP fiduciaries are also exempted from ERISA's prohibition against dealing with a party in interest. Id. § 1106(b)(1). But they are not otherwise excused from the stringent prudent man standard that governs fiduciary conduct under typical ERISA plans. See, e.g., Quan, 623 F.3d at 878; Moench, 62 F.3d at 569; Fink v. Nat'l Sav. & Trust Co., 772 F.2d 951, 955 (D.C.Cir.1985).
Whether a standard of conduct such as ERISA's prudent man standardis judicially enforced turns on the standard of review used to test the legality of the conduct at issue. In many contexts, the two standards are aligned. For instance, the standard of conduct that governs automobile drivers is that they should drive carefully, and the standard of review in a liability claim against a driver is whether he drove carefully. Melvin Aron Eisenberg, The Divergence of Standards of Conduct and Standards of Review in Corporate Law, 62 FORDHAM L.REV. 437, 437 (1993) (internal footnote omitted). In such instances, the governing standard of conduct retains its bite. In other areas of the law, however, prudential judgment counsels in favor of adopting a standard of review that is more lenient than the applicable standard of conduct. See id. Corporate law provides a useful example. As a normative matter, directors of a corporation are generally expected to perform their functions in good faith, and with the degree of care that an ordinarily prudent person in a like position would use under similar circumstances. See, e.g., N.Y. BUS. CORP. LAW § 717(a). This standard of conduct is fairly demanding, but the standard of review used to test whether directors are liable for violating the duty of due care is less stringent. See Eisenberg, supra, at 441. Under the business judgment rule, directors are entitled to a presumption that, in making a business decision, they acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company. See, e.g., Dist. Lodge 26, Int'l Ass'n of Machinists & Aerospace Workers, AFL-CIO v. United Techs. Corp., 610 F.3d 44, 52 (2d Cir.2010). Considerations of fairness and policy led to the adoption of this deferential standard. Eisenberg, supra, at 443. Business judgments are often made on the basis of incomplete information and in the face of obvious risks. Id. at 444. A reasonableness standard of review could thus discourage directors from making bold but desirable decisions, and might even deter directors from serving at all. Id. In addition, courts are ill-equipped to determine after the fact whether a particular business decision was reasonable under the circumstances. William T. Allen, Jack B. Jacobs & Leo E. Strine, Jr., Realigning the Standard of Review of Director Due Care with Delaware Public Policy: A Critique of Van Gorkom and its Progeny as a Standard of Review Problem, 96 NW. U.L.REV. 449, 452 (2002). Examining directors' decisions under a standard of review that is more lenient than the relevant standard of conduct thus furthers important public policy values. Id. at 449.
I am not persuaded that considerations of public policy require Moench -type deference to the investment decisions of ESOP fiduciaries, which results in an emasculation of ERISA's prudent man standard of conduct.
The named plaintiff in Moench alleged that the fiduciaries of his ESOP breached ERISA standards of conduct by continuing to invest in employer stock despite the deterioration of the employer's financial condition. See Moench, 62 F.3d at 558-59. For our purposes, the issue in Moench was what standard of review is appropriate to test the fiduciaries' liability for their investment decisions. See id. at 568. See also Edgar v. Avaya, Inc., 503 F.3d 340, 346 (3d Cir.2007). To answer this question, the Moench court first considered the special status of ESOPs under ERISA. Moench, 62 F.3d at 568. Specifically, the court noted that ESOP fiduciaries are exempt from ERISA's duty to diversify, and from the statute's prohibition against dealing with a party in interest. Id. (discussing the exemptions under 29 U.S.C. §§ 1104(a)(2) and 1108(b)(1).) The court explained that these exemptions arise[ ] out of the nature and purpose of ESOPs themselves, id., which is to `invest primarily in qualifying employer securities,' Edgar, 503 F.3d at 346 (quoting 29 U.S.C. § 1107(d)(6)(A)). That ESOPs are undiversified means that they place participants' retirement assets at much greater risk than other ERISA plans. Moench, 62 F.3d at 568 (internal quotations omitted). But Congress did not intend ESOPs to guarantee retirement benefits. Id. Rather, Congress intended that ESOPs would function as both employee retirement benefit plans and as a technique of corporate finance that would encourage employee ownership. Id. at 569 (internal quotations omitted). Notwithstanding ESOPs' unique status, the Moench court emphasized that ESOP fiduciaries are still required to act in accordance with ERISA's standards of prudence and loyalty. See Moench, 62 F.3d at 569; see also Edgar, 503 F.3d at 346. According to the Moench court, the appropriate standard of review was thus one that would preserve a balance between, on the one hand, the goals of ESOPs, and on the other, ERISA's stringent fiduciary duties. In short, the appropriate standard of review would ensure that competent fiduciaries would not be deterred from service, and unscrupulous ones would not be given license to steal. Moench, 62 F.3d at 569 (internal quotations omitted). The court rejected plenary review as destructive of such balancing. See id. at 570. The court reasoned that strict judicial scrutiny of fiduciaries' investment decisions would render meaningless the ERISA provision excepting ESOPs from the duty to diversify. Id. In addition, the court feared that plenary review would risk transforming ESOPs into ordinary pension benefit plans, which would frustrate Congress's desire to facilitate employee ownership. Id. After all, the court asked, why would an employer establish an ESOP if its compliance with the purpose and terms of the plan could subject it to strict judicial second-guessing? Id. Finally, the court looked to the common law of trusts, which requires that interpretation of trust terms be controlled by the settlor's intent. Moench v. Robertson, 62 F.3d 553, 570 (3d Cir.1995). That principle is not well served in the long run by ignoring the general intent behind such plans in favor of giving beneficiaries the maximum opportunities to recover their losses. Id. To fashion the appropriate standard of review, the court again found guidance in the common law of trusts. See id. at 571. According to Moench, where a trust instrument requires the trustee to invest in a particular stock, the trustee is generally immune from judicial inquiry, id., see also Edgar, 503 F.3d at 346, but where the instrument merely permits a particular investment, trust law calls for plenary review of the investment decision, id. The fiduciaries in Moench were not required to invest in employer securities, but they were more than simply permitted to make such investments. Moench, 62 F.3d at 571. The court therefore determined that an intermediate abuse of discretion standard would strike the appropriate balance between immunity from judicial review, at one extreme, and de novo review, at the other. Edgar, 503 F.3d at 347; see also Moench, 62 F.3d at 571 ([T]he most logical result is that the fiduciary's decision to continue investing in employer securities should be reviewed for an abuse of discretion.). Pursuant to this deferential review, an ESOP fiduciary who invests plan assets in employer stock is entitled to a presumption that it acted consistently with ERISA by virtue of that decision. However, the plaintiff may overcome that presumption by establishing that the fiduciary abused its discretion by investing in employer securities. Moench, 62 F.3d at 571. To do so, plaintiffs must show that the fiduciaries could not have believed reasonably that continued adherence to the ESOP's direction was in keeping with the settlor's expectations of how a prudent trustee would operate. Id. Thus, plaintiffs may introduce evidence to the effect that, owing to circumstances not known to the settlor and not anticipated by him, investing in employer securities would defeat or substantially impair the accomplishment of the purposes of the trust. [3] Id. (internal quotations omitted).
The question remains whether the policy concerns articulated in Moench and reiterated by the majority herewarrant our adoption of a standard of review that is more lenient than ERISA's prudent man standard of conduct. I answer that question in the negative.
In my view, the Moench presumption strikes no acceptable accommodation, (Maj. Op. at 138), between the competing ERISA values of protecting employees' retirement assets and encouraging investment in employer stock. The majority favorably cites to decisions that note that the Moench presumption would be difficult to rebut, [4] and that refer to the presumption as a substantial shield [5] to fiduciary liability. As these authorities implicitly acknowledge, the Moench presumption precludes, in the ordinary course, judicial enforcement of the prudent man standard of conduct. In a case that was argued in tandem with the instant matter, [6] the Secretary of Labor noted that the Moench presumption relegates the duty of prudence to protecting employees only from the complete loss of their assets in the wake of a company's collapse, thereby leaving them otherwise unprotected from the careless management of plan assets. Brief for the Secretary of Labor as Amicus Curiae Supporting Plaintiffs-Appellants, Gearren v. McGraw-Hill Cos., (2d Cir. June 4, 2010) (No. 10-792-cv), 2010 WL 2601687, at . This cannot be what Congress envisioned when it enacted ERISA. Cf. ILGWU Nat'l Ret. Fund v. Levy Bros. Frocks, Inc., 846 F.2d 879, 885 (2d Cir.1988) (citing IUE AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 127 (3d Cir.1986) for the proposition that ERISA, as a remedial statute, should be liberally construed in favor of protecting the participants in employee benefits plans (internal quotations omitted)). ERISA is paternalistic, Van Boxel v. Journal Co. Emps.' Pension Trust, 836 F.2d 1048, 1052 (7th Cir. 1987), and it is thus incongruous to deny participants meaningful judicial review on the theory that investment in employer stock should be encouraged. The statutory structure further demonstrates the impropriety of Moench 's accommodation. ESOPs are merely one type of benefit plan under the broader ERISA framework. That they are exempt from certain of ERISA's standards of conduct does not mean that the policies favoring ESOPs should override the policies of ERISA. Indeed, when a general statutory policy is qualified by an exception, courts generally read `the exception narrowly in order to preserve the primary operation of the [policy].' John Hancock Mut. Life Ins. Co. v. Harris Trust & Sav. Bank, 510 U.S. 86, 97, 114 S.Ct. 517, 126 L.Ed.2d 524 (1993) (parenthetically quoting Comm'r of Internal Revenue v. Clark, 489 U.S. 726, 739-40, 109 S.Ct. 1455, 103 L.Ed.2d 753 (1989)). Accordingly, the investment decisions of ESOP fiduciaries must be subject to the closest scrutiny under the prudent person rule, in spite of the strong policy and preference in favor of investment in employer stock. Fink v. Nat'l Sav. & Trust Co., 772 F.2d 951, 955-56 (D.C.Cir. 1985) (internal quotations omitted); see also Eaves v. Penn, 587 F.2d 453, 460 (10th Cir.1978) (ESOP fiduciaries are subject to the same fiduciary standards as any other fiduciary except to the extent that the standards require diversification of investments.). Had Congress intended to accommodate ERISA's competing values by requiring deferential review of ESOP fiduciaries' decisions, it could have provided for that result. See, e.g., 5 U.S.C. § 706(2)(A) (Administrative Procedure Act) (establishing a deferential standard of review over agency determinations).
I further reject the Moench court's assertion, echoed by the majority here, that plenary review of a fiduciary's investment decisions would spell doomsday for the ESOP institution. See Moench, 62 F.3d at 570; Maj. Op. at 139. ESOPs (under ERISA) had been in existence for more than twenty years before the Court of Appeals for the Third Circuit issued its decision in Moench. I have seen no evidence that plenary review during that time or thereafter [7] resulted in ESOP termination, or deterred ESOP formation. ESOP growth apparently slowed in the early 1990s. But commentators (including the ESOP Association, an amicus here) attribute the subsidence to legislative and market factorsnot to fiduciaries' fears of being subjected to a particular brand of judicial review. [8] The Moench court questioned why an employer would establish an ESOP if its compliance with the purpose and terms of the plan could subject it to strict judicial second-guessing[.] Moench, 62 F.3d at 570. But the incentives for ESOP creation are well documented. First, corporations often establish ESOPs to help raise funds, which can then be used, for example, to provide working capital or to buy out large shareholders. See Michael E. Murphy, The ESOP at Thirty: A Democratic Perspective, 41 WILLAMETTE L.REV. 655, 664 (2005). Second, ESOPs confer significant tax advantages on employers. [9] Third, employers use ESOPs to accomplish various business objectives, including management entrenchment (by placing large amounts of stock in friendly hands), and avoiding hostile takeovers (by purchasing publicly held shares of employer stock as a defensive measure). See Aditi Bagchi, Varieties of Employee Ownership: Some Unintended Consequences of Corporate Law and Labor Law, 10 U. PA. J. BUS. & EMP. L. 305, 317 (2008). In light of these, and other incentives, some commentators note that ESOPs have been used more to the advantage of the firm than its employees. Id. at 316 (internal quotations omitted). I thus find implausible the suggestion that plenary review of fiduciaries' investment decisions would suddenly deter ESOP formation or lead to widespread plan termination.
I also disagree with the contention that plenary review of the prudence of fiduciaries' investment decisions would transform fiduciaries into virtual guarantors of the financial success of the [ESOP], Moench, 62 F.3d at 570 (alteration in original) (internal quotations omitted); see also Maj. Op. at 138 (stating that absent deferential review, fiduciaries would be equally vulnerable to suit either for not selling if they adhered to the plan's terms and the company stock decreased in value, or for deviating from the plan by selling if the stock later increased in value). The foregoing arguments misperceive the nature of the prudence inquiry, and the effect of plenary review. The test of prudence is one of conduct, not results. See Bunch v. W.R. Grace & Co., 555 F.3d 1, 7-8 (1st Cir.2009). Accordingly, whether a fiduciary acted prudently at the time he engaged in a challenged transaction turns on whether he employed the appropriate methods to investigate the merits of the investment. Flanigan v. Gen. Elec. Co., 242 F.3d 78, 86 (2d Cir.2001) (internal quotations omitted). A fiduciary who discharges his duty of prudence will not be liable merely because the investment ultimately fails, see DiFelice v. U.S. Airways Inc., 497 F.3d 410, 424 (4th Cir.2007), just as a surgeon who abides by the applicable standard of care will not be liable in negligence merely because his patient expires on the operating table. In short, the duty of prudencewhich is concerned with conductdoes not require a fiduciary to become a guarantorwho is concerned with results. See DeBruyne v. Equitable Life Assurance Soc'y of the U.S., 920 F.2d 457, 465 (7th Cir.1990). Plenary review could not possibly alter that dichotomy, because the basis for liability is a breach of the duty of prudence, which is not a guarantee but a standard of conduct that Congress imposed and that the fiduciary can satisfy by acting reasonably. Roth v. Sawyer-Cleator Lumber Co., 16 F.3d 915, 920 (8th Cir.1994).
I further disagree with the contention that plenary review of fiduciaries' investment decisions would read the diversification exemption out of ERISA. See Moench v. Robertson, 62 F.3d 553, 570 (3d Cir.1995). As previously noted, ERISA provides that the diversification requirement... and the prudence requirement ( only to the extent that it requires diversification )... is not violated by acquisition or holding of ... qualifying employer securities. 29 U.S.C. § 1104(a)(2) (emphasis added). The exemption thus allows ESOP fiduciaries to be released from certain per se violations on investments in employer securities. Eaves, 587 F.2d at 459. Of course, the absence of a general diversification duty from the ESOP setting does not eliminate fiduciaries' duty of prudence. See 29 U.S.C. § 1104(a)(2); Armstrong v. LaSalle Bank Nat'l Ass'n, 446 F.3d 728, 732 (7th Cir.2006). An ESOP fiduciary may invest plan assets in employer securities so long as it remains prudent to do so. See id. And plenary review of that question i.e., of the prudence of a fiduciary's investment decisionssimply has no impact on the continued viability of ESOPs' statutory exemption from per se liability for the failure to diversify. The Secretary of Labor, in her amicus brief, explains the distinction well: The plaintiffs here ... do not base their claims on the failure to diversify holdings of an otherwise prudent investment. Instead, they assert that the market was being misled to overvalue the stock, and that the plan's fiduciaries continued to purchase and hold the stock anyway. Diversification is not the issue; it was imprudent for the fiduciaries to knowingly buy even a single share at an inflated price. Brief for the Secretary of Labor as Amicus Curiae Supporting Plaintiffs-Appellants, In re Citigroup ERISA Litig., (2d Cir. Dec. 28, 2009) (No. 09-3804-cv), 2009 WL 7768350, at  n. 2. In other words, although in the ESOP context there is no duty to diversify as such, there is still a duty of prudence. And in particular cases, the duty of prudence might ... become a duty to diversify, even though failure to diversify an ESOP's assets is not imprudence per se. Steinman v. Hicks, 352 F.3d 1101, 1106 (7th Cir.2003) (emphasis added). Accordingly, whether courts evaluate the prudence of fiduciaries' conduct under plenary review does not endanger ESOPs' statutory exemption from per se liability for the failure to diversify.
In sum, I cannot join in the majority's adoption of the Moench presumption, which is premised on indefensible policy concerns, and which, contrary to the congressionally enacted purposes of the Employee Retirement Income Security Act, greatly imperils the security of employees' retirement incomes. Because I decline to adopt the presumption, I need not opine on its application to this case. Instead, I would hold that the sufficiency of plaintiffs' Prudence Claim must be evaluated under plenary review. I now undertake that evaluation.

To state a claim for breach of fiduciary duty under ERISA, plaintiffs must adequately allege that defendants were plan fiduciaries who, while acting in that capacity, engaged in conduct constituting a breach of fiduciary duty under ERISA. See 29 U.S.C. § 1109; Pegram v. Herdrich, 530 U.S. 211, 222-24, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000). I agree with the majority that plaintiffs sufficiently alleged that the Investment Committee and the Administration Committee were ERISA fiduciaries with respect to plaintiffs' ability to invest through the Plans in Citigroup stock. Accordingly, I turn now to whether plaintiffs' allegations, accepted as true, would render it plausible that these defendants, acting in their fiduciary capacities, breached any ERISA-imposed responsibilities, obligations or duties. As previously noted, an ERISA fiduciary must discharge his duties with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. 29 U.S.C. § 1104(a)(1)(B). The court's task in evaluating fiduciary compliance with the prudent man standard is to inquire whether the individual [fiduciary], at the time [he] engaged in the challenged transactions, employed the appropriate methods to investigate the merits of the investment and to structure the investment. Flanigan, 242 F.3d at 86 (internal quotations omitted). The question is thus whether the fiduciary acted reasonably in light of the facts of which he knew or should have known at the time he engaged in the challenged transaction. See Roth, 16 F.3d at 920. A [fiduciary] who simply ignores changed circumstances that have increased the risk of loss to the trust's beneficiaries is imprudent. Armstrong, 446 F.3d at 734.
I would hold that plaintiffs have stated a claim against the Investment and Administration Committees for breach of the duty of prudence. Plaintiffs' allegations, if true, render it plausible that the Investment and Administration Committees knew about Citigroup's massive subprime exposure. To see why this is so, we must briefly examine (a) plaintiffs' allegations regarding the responsibilities (and membership) of the Investment and Administration Committees, and (b) the broader context of the subprime crisis, as well as Citigroup's prominent role in it. Pursuant to Plan documents, the Administration Committee was charged with managing the operation and administration of the Plans. The Plans also delegated to the Administration Committee the authority to impose certain restrictions on participants' investment selections. Meanwhile, the Plan documents charged the Investment Committee with, among other things, selecting and monitoring investment options for the Plans; it had the discretion and authority to suspend, eliminate, or reduce any Plan investment, including investments in Citigroup stock. Compl. ¶ 69. Plaintiffs explicitly allege that the Investment Committee regularly exercised its authority to suspend, eliminate, reduce, or restructure Plan investments. Id. Given plaintiffs' allegation that, as of 2008, Citigroup was the largest bank in the world in terms of revenue, we may reasonably infer (a) that Citigroup appointed relatively sophisticated businesspersons to staff the Investment Committee (as well as the Administration Committee); and (b) that such relatively sophisticated Investment Committee members would have had at least a basic knowledge of current events and market trends, especially insofar as they related to the selection and monitoring of Plan investments. Plaintiffs' Complaint contains detailed allegations regarding the growth of subprime lending and Citigroup's ill-fated entry into the subprime marketplace. By 2006 and 2007, reports of an incipient subprime meltdown began to appear in the Wall Street Journal, the New York Times, the Financial Times, Bloomberg News, and Reuters. Id. ¶ 189(a)-(y). Plaintiffs allege that the crisis was foreseeable by at least the end of 2006, given the steady decline in the housing market, ... the plethora of published reports by governmental agencies, real estate and mortgage industries, [and] the media at large. Id. ¶ 136. Citigroup allegedly increased its activity in the subprime and securitization market in early 2005. By November 2007, its subprime exposure amounted to a staggering $55 billion in at least one of its banking unitsalmost 30% of what the entire Company was worth at the time. Id. ¶ 134. According to plaintiffs, Citigroup reported subprime-related losses of $18.1 billion for the fourth quarter of 2007, and $7.5 billion for the first quarter of 2008. Plaintiffs allege that, as a result of Citigroup's dire financial condition, its share price declined by over 74% between June 2007 and July 2008a loss of over $200 billion in market value in a little over one year. Id. ¶ 175. The losses sustained during the Class Period of January 1, 2007 through January 15, 2008 allegedly had an enormous impact on the value of participants' retirement assets, id. ¶ 238. Such allegations support a reasonable inference that the relatively sophisticated members of the Investment Committee by virtue of their responsibilities as fiduciaries of the Planswould have had at least some awareness of both Citigroup's massive subprime exposure, and the growing potential for a market-wide crisis. That is, members of the Investment Committee were charged with selecting and monitoring Plan investment options, including Citigroup stock, which was the Plans' single largest asset. [10] It is thus reasonable to infer that in discharging their investment-related duties, Investment Committee members would have informed themselves of material information concerning Citigroup's business and operations that was relevant to the appropriateness of investing Plan assets in Citigroup stock. See In re Coca-Cola Enters. Inc., ERISA Litig., No. 06 Civ. 0953, 2007 WL 1810211, at  (N.D.Ga. June 20, 2007) (ruling that complaint withstood dismissal where plaintiffs alleged that defendants were senior employees who knew or should have known all material public and nonpublic information concerning [the employer's] business and operations that were relevant to the appropriateness of [the employer's] common stock as a Plan investment (internal quotations omitted)); In re Westar Energy, Inc., ERISA Litig., No. 03-4032, 2005 WL 2403832, at  (D.Kan. Sept. 29, 2005) (ruling that complaint withstood dismissal where plaintiffs alleged that at least some of the Committee members knew or should have known [of alleged misrepresentations] based on their status as officers in the Company, and based on their own conduct (emphasis added)). The Complaint's well-pleaded allegations also support a reasonable inference that the Administration Committee knew of Citigroup's dire financial condition, Compl. ¶ 175. At least one individual, Richard Tazik, apparently served on both the Investment Committee and the Administration Committee during the relevant time period. On the above analysis, it is at least plausible that Mr. Tazik, by virtue of his service on the Investment Committee, knew about Citigroup's subprime exposure. And because Mr. Tazik also allegedly served on the Administration Committee, it is plausible that at least one member of that Committee knew about it as well. If, in light of this knowledge, reasonably prudent fiduciaries would have taken meaningful steps to protect the Plans' participants from the inevitable losses ... [that] would ensue as [Citigroup's] non-disclosed material problems ... became public, id. ¶ 228, then defendants may have acted imprudently. [11] That, however, is a fact-intensive inquiry ill-suited for resolution at the pleading stage. I would thus vacate the District Court's dismissal and remand for further proceedings.