Court Opinion

ID: 3004409
Source: CourtListenerOpinion
Date Created: 2015-09-24 22:49:40.668215+00
Date Added: 2024-06-11T11:39:14.714322
License: Public Domain

In the

 United States Court of Appeals
                For the Seventh Circuit

No. 07-3837

B RUCE G. H OWELL,
                                                   Plaintiff-Appellant,
                                   v.

M OTOROLA , INC., et al.,
                                                Defendants-Appellees.

No. 09-2796

S TEPHEN L INGIS, et al.,
                                                 Plaintiffs-Appellants,
                                   v.

R ICK D ORAZIL, et al.,
                                                Defendants-Appellees.

             Appeals from the United States District Court
         for the Northern District of Illinois, Eastern Division.
             No. 03 C 5044—Rebecca R. Pallmeyer, Judge.

           A RGUED O CTOBER 23, 2008 & M AY 27, 2010
                  D ECIDED JANUARY 21, 2011
2                                     Nos. 07-3837 & 09-2796

    Before B AUER, W OOD , and T INDER, Circuit Judges.
  W OOD , Circuit Judge. The two cases that we have con-
solidated for decision in this opinion both deal with the
responsibilities of a company with respect to a defined-
contribution pension plan that it offers to its employees.
The company in each instance is Motorola, Inc., and
the disputes concern employees’ retirement accounts in
the Motorola 401(k) Savings Plan (the “Plan”). Bruce
Howell was the original plaintiff when this litigation
began in 2003; later, Stephen Lingis, Peter White, and
Donald Smith intervened as plaintiffs. All were em-
ployees of Motorola who participated in the Plan. In
2007, the district court certified a plaintiff class of all
persons for whose individual accounts the Plan pur-
chased or held shares of Motorola common stock, from
May 16, 2000, through May 14, 2001. (The court later
excluded from that class the defendants, Motorola
officers and directors, and persons who signed valid
releases of their claims against Motorola. Since no issue
pertaining to the class certification or definition is before
us, we have no other comment on those points.) The
defendants include not only Motorola itself, but also
the Profit Sharing Committee of Motorola, Inc., and a
number of individual defendants who allegedly served as
fiduciaries for the Plan. We describe the facts in detail
below. It is enough here to say that Motorola entered
into a business transaction that turned out very badly;
the fallout from that transaction caused the price of
Motorola’s stock to decline; that decline led to litigation
against Motorola under the securities laws; and finally,
Nos. 07-3837 & 09-2796                                    3

because a Motorola Stock Fund was among the permissible
investments for the Plan, this litigation ensued.
  Relying on the Employment Retirement Income
Security Act of 1974, 29 U.S.C. § 1001 et seq., known to all
as ERISA, the plaintiffs seek relief for three alleged
breaches of fiduciary duty committed by the defendants:
(1) imprudence, by selecting and continuing to offer the
Motorola Stock Fund to Plan participants despite the
defendants’ knowledge of Motorola’s bad business trans-
action; (2) either negligent or intentional misrepresenta-
tion of material information about the bad business
transaction or failure to disclose that information to
Plan participants; and (3) failure to appoint competent
fiduciaries to the committee that ran the Plan, failure
to monitor those fiduciaries, and failure to provide ade-
quate information to the fiduciaries themselves. The
district court granted summary judgment in favor of all
the defendants on all claims, ruling first that no one
had breached any duty imposed by ERISA, and second,
that all defendants were entitled to rely on the safe
harbor established in section 404(c) of the statute, 29
U.S.C. § 1104(c). We conclude that the safe harbor is
available for the plaintiffs’ disclosure and monitoring
theories (the latter two listed above), but not for the
imprudence theory. Nevertheless, we also conclude that
the Plan fiduciaries did not breach any duty imposed by
ERISA through their inclusion of the Motorola Stock
Fund as a Plan investment option. We therefore affirm
the judgments of the district court.
4                                    Nos. 07-3837 & 09-2796

                 I. General Background
                         A. Telsim
  Motorola is a large telecommunications company.
During the boom years of the 1990s, its stock price in-
creased ten-fold, as the company expanded throughout
the world. The seeds of the present case were planted
when, on April 24, 1999, a Motorola affiliate called the
Motorola Credit Corporation (“Credit”) signed an agree-
ment to provide financing to a Turkish company, Telsim
Mobil Telekomunikasyon Hizmetleri A.S. (“Telsim”), for
a project to improve the infrastructure for mobile tele-
phone service in Turkey. Over time, Telsim borrowed
more than $1.8 billion from Credit; to secure the debt, it
pledged a number of shares then equaling 66% of its
stock as collateral. Telsim’s promise unfortunately
did not turn out to be worth very much. In April 2001, it
missed its first repayment deadline, and the next
month Credit issued a notice of default. Unbeknownst
to Credit or Motorola, around the same time Telsim
tripled the number of its outstanding shares, thus
diluting Credit’s collateral to about 22% of Telsim’s shares.
   The parties in the cases before us dispute how forth-
coming Motorola was about its problems with Telsim in
its filings with the Securities and Exchange Commission
during this period. Almost a year earlier, on May 16,
2000, Motorola had filed a 10-Q quarterly report with the
SEC in which it reported that it had an agreement with
Telsim. (That date marks the beginning of the class
period defined by the district court.) The May 16 report
optimistically estimated the sales potential from the
Nos. 07-3837 & 09-2796                                      5

agreement to be $1.5 billion over three years; it said
nothing about the fact that Credit had loaned the lion’s
share of the funding for the project to Telsim. Motorola
said nothing more about Telsim in its SEC filings until
a proxy statement filed on March 30, 2001. In that docu-
ment, Motorola remarked that it had received several
large contracts, including one “for Telsim’s countrywide
network in Turkey.” Ten pages later, in an unrelated
section, the report explained that Motorola was owed
$2.8 billion as the result of financing it had provided
for wireless infrastructure. “[A]pproximately $1.7 billion
of the $2.8 billion,” said the company, “related to one
customer in Turkey.” The 10-Q that Motorola filed on
May 14, 2001, was slightly more direct: it acknowledged
that “[a]s of March 31, 2001, approximately $2.0 billion
of [Motorola’s] $2.9 billion in gross long-term finance
receivables related to one customer, Telsim, in Turkey. . . .”
The report mentioned Telsim’s pledge of 66% of its
shares to secure repayment of that debt, and it said
vaguely that “Motorola has other creditor remedies.”
Finally, the 10-Q report disclosed Telsim’s failure to
make the payment of $728 million that was due on
April 30, 2001. (The May 14, 2001, filing date of
Motorola’s quarterly report marks the end of the dis-
trict court’s class period.)
  The only other disclosures that Motorola made be-
tween May 16, 2000, and May 14, 2001, did not mention
Telsim by name. Instead, they offered generic references
to Motorola’s practice of vendor financing. For example,
Motorola’s November 2000 10-Q warned that certain
factors could affect the company’s financial results;
6                                  Nos. 07-3837 & 09-2796

one factor it listed was “the demand for vendor
financing and the Company’s ability to provide that
financing in order to remain competitive.” Defendant Carl
Koenemann, Motorola’s Chief Financial Officer, discussed
potential problems with Telsim with KPMG, Motorola’s
accounting firm, during this time. He also raised the
subject with defendant Christopher Galvin, the Chairman
of Motorola’s Board and the Chief Executive Officer
during the relevant time, and with defendant Robert
Growney, a director and Motorola’s Chief Operating
Officer. The district court noted that the record contains
no evidence that any of the other defendants had any
knowledge of problems with the Telsim deal.
  As we have noted, Motorola’s stock price increased
significantly throughout the 1990s. On April 24, 1999,
shares were trading at a price close to $30. Although the
price spiked to about $40 per share by May 1, 2000, it
had slipped back to just over $30 per share by May 16,
2000—the day when Motorola filed the 10-Q announcing
the planned sales to Telsim (but not mentioning the
corresponding financing) and the start date of the
class period. Motorola’s stock price continued to decline
during the class period. The price was steady through
the fall, but as of December 31, 2000, it had fallen to $20
per share. On that date, Motorola announced that it
had net income for the fiscal year of $2.2 billion.
  In January 2001, Motorola gave a Summary Plan De-
scription (“SPD”) to all of its employees who were par-
ticipating in the Plan. That SPD warned participants
that there was some risk in investing in the Motorola
Nos. 07-3837 & 09-2796                                7

Stock Fund. The Plan had explained this risk on two
separate occasions during the preceding year in docu-
mentation handed out to Plan participants. Moreover,
Motorola’s March 30, 2001, proxy statement, which we
discussed above, reiterated the risk of the Motorola
Stock Fund, noting that $1.7 billion of the company’s
$2.8 billion in gross long-term finance was tied up with
“one customer in Turkey.” By the time that statement
was filed, Motorola stock had dropped to $14.26 per
share. A week later, on April 6, 2001, Bloomberg News
broke the story of the Telsim deal, identifying Telsim
as “the customer in Turkey” that owed Motorola bil-
lions. Motorola stock sank 23% in one day, going
from $14.95 to $11.50 per share. Interestingly, however,
it had recovered a bit (to just above $15) by May 14,
2001—the end date of the class period and the day on
which Motorola filed the 10-Q with the SEC that
discussed the Telsim problems in some detail. Credit
issued a notice of default on May 22, 2001. The stock
then edged up to $19 a share by the end of July, but it
fell back to $15 a share by December 31, when Motorola
reported a net loss of $5.5 billion for the year.

          B. The Motorola 401(k) Savings Plan
  The Plan is a defined-contribution plan established
pursuant to ERISA section 407, 29 U.S.C. § 1107(d)(3).
This means that participants may contribute up to a
specified amount to individual accounts; those contribu-
tions are often (as here) matched to some degree by
the employer. Upon retirement, the participating em-
8                                  Nos. 07-3837 & 09-2796

ployee has whatever the account has accumulated
through contributions and earnings. Unlike a defined-
benefit plan, it does not assure any fixed level of retire-
ment income. See LaRue v. DeWolff, Boberg & Associates,
Inc., 552 U.S. 248, 250 n.1 (2008). In this case, Motorola
matched participant contributions up to 3% of the em-
ployee’s salary, and it paid 50 cents on the dollar for
participant contributions beyond that, up to 6% of salary.
The Plan is organized under ERISA section 404(c), 29
U.S.C. § 1104(c); this means that the participants (not
the Plan fiduciaries) are solely responsible for allocating
assets among the various funds supported by the
Plan. KPMG periodically audited the Plan to ensure
compliance with Plan documents.
  During the relevant period, the Plan Administrator
was a group called the Profit Sharing Committee (the
“Committee”), which was made up of people appointed
by Motorola’s Board of Directors. The Committee
selected the investments that the Plan would offer its
participants, monitored those investments, and provided
reports to the Board. Defendant Koenemann served on
the Committee for the entire class period, as did
Paul DeClerck, Rich Engstrom, and Garth Milne (all of
whom were at one point defendants in this lawsuit). Gary
Tooker, a member of Motorola’s Board, chaired the Com-
mittee from May 2, 2000, until the end of 2000, at which
point Koenemann succeeded him. Steve Earhart,
Motorola’s Vice President of Finance, served on the
Committee from May 8, 2001, until the end of the
class period. The Committee monitored the Plan’s invest-
Nos. 07-3837 & 09-2796                                 9

ment options and periodically provided reports to
Motorola’s Board. It ceased to exist on January 1, 2006.
  Before July 1, 2000, Plan participants could channel
their contributions (and those Motorola made on their
behalf) to any or all of four investment options: (1) the
Balanced Fund, (2) the Equity Fund, (3) the Short-Term
Income Fund, and (4) the Motorola Stock Fund. After
that date, the Plan offered nine choices: (1) the Short-
Term Bond Fund, (2) the Long-Term Bond Fund,
(3) Balanced Fund I, (4) Balanced Fund II, (5) the Large
Company Equity Fund, (6) the Mid-Sized Company
Equity Fund, (7) the International Equity Fund, (8) the
Small Company Fund, and (9) the Motorola Stock Fund.
For the entire relevant time, excluding a brief black-out
period that ran from May 1 to June 30, 2000, during
which participants were not allowed to make changes
in their accounts, Plan participants were entitled to
transfer funds out of the Motorola Stock Fund on a
daily basis. Before May 1, 2000, they had been allowed
to make transfers relating to other investment options
only on a monthly basis; but after July 1, 2000, they
could move their assets from or to any of the funds
offered on a daily basis.
  This case involves the decision of the Plan and
associated defendants to include, as one option for Plan
participants, the Motorola Stock Fund. As the name
suggests, that is a fund that exclusively holds Motorola
common stock. Up until July 1, 2000, participants were
not permitted to invest any more than 25% of their
Plan assets in the Motorola Stock Fund—essentially they
10                                 Nos. 07-3837 & 09-2796

were forced to diversify. But then the Motorola em-
ployees voted to lift that cap and to permit participants
to invest up to 100% of their assets in that fund. The
Plan’s governing documents allowed, but did not re-
quire, the Plan to offer the Motorola Stock Fund as one
option, and no Plan participant was ever required to
invest in that fund.
  Many of the communications that the Plan Admin-
istrators disseminated to Plan participants rated the
Motorola Stock Fund as the highest-risk investment
offered in the Plan. These missives noted that the fund
was not diversified, that it was volatile and subject to
substantial year-to-year fluctuations, that participants
were vulnerable to losses from sudden downturns in
securities markets, and that other investments offered
by the Plan did not share these problems.

                 C. Procedural History
  Although the procedural history of these cases is com-
plex, most of it is not relevant to the issues on appeal.
We therefore mention only a few points that remain
important. Howell appealed the district court’s decision
to grant Motorola’s motion to dismiss on the ground
that Howell had signed an enforceable release of his
claims against Motorola. The case (No. 07-3837) reached
us after the district court certified that holding under
Federal Rule of Civil Procedure 54(b). After Howell’s
case was dismissed, Lingis, White, and Smith intervened
in the district court. On September 28, 2007 (about a
month before the court issued its order under Rule 54(b)),
Nos. 07-3837 & 09-2796                                     11

the court certified the class under Federal Rule of Civil
Procedure 23(b)(2), which permits plaintiffs seeking
injunctive relief to proceed as a class. We permitted an
immediate appeal from that decision, pursuant to Rule
23(f), but events in both the district court and the
Supreme Court overtook the appeal. At the district court
level, summary judgment motions were filed and under
consideration. For its part, the Supreme Court handed
down the decision in LaRue, which provided new guidance
on the legal issues surrounding defined-contribution plans.
  On June 17, 2009, the district court granted Motorola’s
motions for summary judgment, denied the plaintiff
class’s motion, and closed the case with a judgment in
favor of the defendants. That case (No. 09-2796) is here
on the class’s appeal of the merits of the district court’s
summary judgment decision. In the meantime, we
agreed to accept interlocutory appeals challenging class
certification under Rule 23(b)(1) in two related cases
decided today, Spano v. The Boeing Co. and Beesley v.
International Paper, Nos. 09-3001 & 09-3018 (7th Cir. Jan. 21,
2011). While the Spano cases concern only the class certifi-
cation issue, they present questions on the underlying
merits that are very similar to the issues in the appeal
now before us. We set oral argument for all of these
cases for May 27, 2010, and carried forward Howell’s
appeal to that group. Between the Spano opinion and
this one, we are now resolving all matters that have
been presented to us.
12                                   Nos. 07-3837 & 09-2796

                     II. Howell Appeal
  Although we earlier identified three major issues on
the merits that are common to both cases, there is a pre-
liminary question in Howell’s case that must be ad-
dressed. It relates to the General Release that Howell
signed, which reads as follows in pertinent part:
     I hereby unconditionally and irrevocably release,
     waive and forever discharge Motorola, Inc. and its
     affiliates, parents, successors, subsidiaries, directors,
     officers, and employees, from ANY and ALL causes
     of action, claims and damages, including attorneys
     fees, whether known or unknown, foreseen or unfore-
     seen, presently asserted or otherwise, which have or
     could have arisen to date out of my employment or
     separation from employment. This General Release
     (“Release”) includes, but is not limited to, any claim
     or entitlement to pay, benefits or damages arising
     under any federal law (including but not limited to . . .
     the Employee Retirement Income Security Act . . .);
     any claim arising under [any other law], or under
     Motorola’s personnel policies. I understand by
     signing this Release I am not releasing any claims for
     benefits under the Motorola employee benefits plan.
     Nor am I waiving any other claims or rights which
     cannot be waived by law . . . .
At the time he signed this release Howell had been
working for Motorola for approximately five years.
Motorola terminated his employment in August 2001 as
part of a more general reduction in force. Pursuant to
Motorola’s severance program, he received an uncondi-
Nos. 07-3837 & 09-2796                                    13

tional standard severance payment. Motorola also
offered the opportunity to receive additional severance
pay for employees who were willing to sign this release.
Howell signed the release on September 17, 2001, nearly
a month after he received it. He acknowledged in the
release that he had been advised to contact an attorney
before signing it; that he was signing voluntarily; that
he had been given at least 45 days in which to consider
it; that he had a right to revoke within seven days of
signing it; and that, in a sense, he was swapping any
future claims he might have against Motorola for the
additional severance benefits.
  Motorola reads this release as a comprehensive
promise not to bring any lawsuit based on ERISA for any
claim that had already accrued at the time that Howell
signed the release. In Motorola’s view, the only ERISA
claims not covered by the release are Howell’s “non-
waivable claims for . . . underlying pension benefit[s]
and claims for benefits that had not yet accrued” when
Howell signed the release. Howell gives much greater
emphasis to the two exceptions contained in the last
two sentences of the release quoted above. He insists
that a lawsuit complaining about a breach of fiduciary
duty under ERISA can still be a “claim for benefits,”
particularly after the Supreme Court’s LaRue decision
blurred the line between suits brought under ERISA
section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (permitting
recovery of benefits due under a plan), and those
brought under section 502(a)(2), 29 U.S.C. § 1132(a)(2)
(providing for suits asserting breach of fiduciary duty). See
generally LaRue, 552 U.S. at 257-60 (Roberts, C.J., con-
14                                   Nos. 07-3837 & 09-2796

curring). One thing is clear: unless Howell can show
that one or the other exception set forth in the release
applies to him, or that his agreement to the release
was somehow not made knowingly and voluntarily, then
the language barring claims that arise under ERISA
disposes of the present case.
  Looking first at the latter question, we start with the
proposition that for a release to be valid, the party must
sign it knowingly and voluntarily. See Alexander v. Gardner-
Denver Co., 415 U.S. 36, 52 n.15 (1974) (applying this
principle to waivers of Title VII rights). A court must
examine the totality of the circumstances surrounding
the signature, including such matters as:
     (1) the employee’s education and business experience;
     (2) the employee’s input in negotiating the terms of
     the settlement; (3) the clarity of the agreement; (4) the
     amount of time the employee had for deliberation
     before signing the release; (5) whether the employee
     actually read the release and considered its terms
     before signing it; (6) whether the employee was repre-
     sented by counsel or consulted with an attorney;
     (7) whether the consideration given in exchange for
     the waiver exceeded the benefits to which the em-
     ployee was already entitled by contract or law; and
     (8) whether the employee’s release was induced by
     improper conduct on the defendant’s part.
Pierce v. Atchison, Topeka and Santa Fe Ry. Co., 65 F.3d 562,
571 (7th Cir. 1995) (footnote omitted). Like other lists of
factors, these are illustrative. The critical question is
whether Howell presented enough evidence in response
Nos. 07-3837 & 09-2796                                   15

to Motorola’s motion for summary judgment somehow
to create a genuine issue of fact on the questions of knowl-
edge and voluntariness.
  The district court thought that he had not, and we
agree with that assessment. Howell suggests that a jury
might find that his signature was unknowing because a
person of his educational level and sophistication
would not have signed away such valuable claims as
this lawsuit represents. This is just an assumption, how-
ever; it is not evidence. Howell does not dispute the
fact that he received the supplemental severance pay-
ment that Motorola gave to those who signed the re-
lease. We are given no reason to believe that a
rational person could not have deemed the amount of
that payment adequate compensation for the rights he
was giving up. Howell offers no concrete information in
his affidavit to support the existence or absence of the
factors identified in Pierce or any other circumstances—
e.g., that he was under heavy medication, or that Motorola
failed to disclose important information at the time he
signed—that might undermine a finding of knowing
and voluntary waiver.
  The next question is whether this lawsuit falls into
the exception recognized in the release for “claims for
benefits under the Motorola employee benefits plan.”
Relying on Harzewski v. Guidant Corp., 489 F.3d 799 (7th
Cir. 2007), Howell argues that it does. He points to the
following passage in Harzewski: “The benefit in a defined-
contribution pension plan is, to repeat, just whatever is
in the retirement account when the employee retires or
16                                  Nos. 07-3837 & 09-2796

whatever would have been there had the plan honored the
employee’s entitlement, which includes an entitlement to
prudent management.” Id. at 804-05 (emphasis in origi-
nal). LaRue, Howell continues, is consistent with this
approach, since LaRue held that an individual em-
ployee has a claim for breach of fiduciary duty with
respect to a plan as a whole, even if only one person’s
account was affected by the breach. LaRue, 552 U.S. at 256.
  Motorola responds that Howell’s reading of the release
would render meaningless the provision waiving
(among other things) his claims under ERISA. Normal
principles of contract interpretation require us to give
effect to each clause of the release. See, e.g., LaSalle Nat.
Trust, N.A. v. ECM Motor Co., 76 F.3d 140, 144 (7th Cir.
1996). It is Motorola’s position that the carve-out for
“claims for benefits” under the Plan cannot be co-extensive
with all ERISA claims without doing violence to the
contract as a whole.
  Since LaRue was decided, it has been unclear whether
a claim for breach of fiduciary duty under section 502(a)(2)
of ERISA, 29 U.S.C. § 1132(a)(2), can be called a “claim
for benefits.” The majority opinion in LaRue recognized
that some breaches of fiduciary duty might impair
the value of plan assets in a participant’s individual
account, even if the plan takes the defined-contribution
form. See 552 U.S. at 256. The Court did not, however,
need to address the question whether these claims
arise exclusively under section 502(a)(2), or if they over-
lap with traditional claims for benefits under section
502(a)(1)(B). Concurring, Chief Justice Roberts called at-
Nos. 07-3837 & 09-2796                                       17

tention to this ambiguity, noting that section 502(a)(1)(B)
“allows a plan participant or beneficiary ‘to recover
benefits due to him under the terms of his plan, to enforce
his rights under the terms of the plan, or to clarify his
rights to future benefits under the terms of the plan.’ ”
LaRue, 552 U.S. at 257 (Roberts, C.J., concurring) (quoting
ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B)). He went on
to point out that there is a significant difference
between the two sections, as there are various safeguards,
including the requirement to exhaust plan remedies
and the possibility of conferring discretion on the plan
administrator, that apply in section 502(a)(1)(B) cases
but are not applicable under section 502(a)(2). LaRue, 552
U.S. at 258-59. He concluded by “highlight[ing] the
fact that the Court’s determination that the present
claim may be brought under § 502(a)(2) is reached
without considering whether the possible availability of
relief under § 502(a)(1)(B) alters that conclusion.” Id. at 259.
  We do not need to resolve that question today, because
our task is an easier one. Rather than parsing the
statute itself, we must decide only what the parties to a
particular contract (the release) meant. Approached as a
contractual matter, the only reading that makes sense
is one under which the reservation of claims for benefits
applies only to any specific benefits that had already
vested in Howell’s 401(k) plan by the time that he
signed the release—there is no reason to think that
Motorola was trying to confiscate those assets. But
under the release, Howell has waived the right to bring
a lawsuit challenging the Plan as a whole, either in
the sense described in Massachusetts Mutual Life Insurance
18                                  Nos. 07-3837 & 09-2796

Co. v. Russell, 473 U.S. 134 (1985), or in the sense
described in LaRue. In short, as a contractual matter, if
the need were to arise (though we are given no reason
to think that it will), Howell remains entitled to sue to
recover the money that was in his retirement account at
the time he signed the release, but he cannot now claim
that his account would have been worth even more had
the defendants not breached a fiduciary duty.
  Howell also asserts that his lawsuit falls under the
clause in the release that exempts claims that are non-
waivable as a matter of law. He relies particularly on
ERISA section 410(a), 29 U.S.C. § 1110(a), the anti-alien-
ation provision, which states:
      Except as provided in sections 1105(b)(1) and
      1105(d) of this title, any provision in an agreement
      or instrument which purports to relieve a
      fiduciary from responsibility or liability for any
      responsibility, obligation, or duty under this part
      shall be void as against public policy.
Howell argues that the part of the release that purports
to cover all claims, past, present, and future, even those
that arise from a breach of fiduciary duty, violates this
part of the statute. Motorola responds that section 410(a)
covers only agreements that would release fiduciaries
from duties in the future. It does not bar, Motorola con-
tinues, settlement of claims arising from past alleged
breaches of fiduciary duty.
 Although we have not had occasion to consider this
question before, the Eighth Circuit did in Leavitt v. North-
western Bell Telephone Co., 921 F.2d 160 (8th Cir. 1990). It
Nos. 07-3837 & 09-2796                                    19

held there that a release is not the kind of “agreement
or instrument” that section 410(a) addresses. Id. at 161.
Instead, it wrote:
    Section 1110(a) prohibits agreements that diminish
    the statutory obligations of a fiduciary. A release,
    however, does not relieve a fiduciary of any responsi-
    bility, obligation, or duty imposed by ERISA; instead,
    it merely settles a dispute that the fiduciary did not
    fulfill its responsibility or duty on a given occasion.
Id. at 161-62. Our decision in Pierce, in the context of
discussing the voluntariness of a waiver, also took note of
the importance of the federal policy in favor of voluntary
settlement of claims. 65 F.3d at 572.
   We conclude that Howell has read too much into
section 410(a), and that his interpretation would make
it impossible, as a practical matter, to settle any ERISA
case. All that the release he signed accomplished was
to settle, in advance, any claims that he might have
brought against Motorola arising out of his employment
there or his participation in the Plan, with the exception
of those benefits that were due to him under the Plan at
the time he signed his release. As the Eighth Circuit
held in Leavitt and as we intimated in Pierce, such a settle-
ment of claims is permissible under the statute.
  In summary, we conclude that the district court
properly granted summary judgment in Motorola’s
favor on Howell’s claims.
20                                  Nos. 07-3837 & 09-2796

                III. Lingis Class Appeal
       A. The Fiduciary Status of the Defendants
   The Lingis class, as we noted earlier, expressly
excludes persons who signed a release, as well as certain
others who might create intra-class conflicts. We are
therefore free to move to the merits. The class is suing
under section 502(a)(2) of ERISA, 29 U.S.C. § 1132(a)(2),
which permits a civil action to be brought “by the Sec-
retary, or by a participant, beneficiary or fiduciary for
appropriate relief under section 1109 of this title [ERISA
section 409].” Section 409 of ERISA creates liability for
a breach of fiduciary duty. See 29 U.S.C. § 1109. The
Supreme Court’s decision in LaRue puts to rest any con-
cern about the ability of a participant in a defined-con-
tribution plan to bring a lawsuit under section 502(a)(2).
(Our companion decisions today in Spano and Beesley
treat this subject in more detail. See Spano and Beesley,
Nos. 09-3001 & 09-3018, slip op. at 6-13.) Three ques-
tions remain: (1) Which, if any, defendants are Plan
fiduciaries as ERISA understands the term? (2) Did any
fiduciary breach his, her, or its duties? And (3) did any
such breach cause harm to the plaintiffs? Brosted v. Unum
Life Ins. Co. of America, 421 F.3d 459, 465 (7th Cir. 2005).
If a particular defendant is not a fiduciary, then nothing
more need be said. Similarly, even if a particular
defendant is a fiduciary, if it did not breach any
fiduciary duty, then there is no need to reach the ques-
tion whether its actions harmed the plaintiffs. Our dis-
cussion proceeds with those basic principles in mind,
beginning with the question whether the various defen-
dants named are Plan fiduciaries.
Nos. 07-3837 & 09-2796                                  21

   1. Motorola, Inc. The list of defendants involved in
this litigation is long, but we can treat the defendants
in groups. The first question is whether Motorola, Inc.,
itself is a Plan fiduciary. The district court thought that
it was not. Recognizing that a company may be a plan
fiduciary as a result of its selection of plan admin-
istrators, the district court noted that Motorola’s Board,
rather than its executive officers, made appointments to
the Committee. It believed that this was enough to
exclude Motorola from the case.
  We are not inclined to draw such a sharp distinction
between the Board, acting on behalf of Motorola, and
Motorola itself. Accordingly, we think it best to consider
Motorola’s status in slightly more detail. Courts have
been careful to respect the distinction between the
capacity of fiduciary or plan administrator, on the one
hand, and employer or plan author on the other. See, e.g.,
Lockheed Corp. v. Spink, 517 U.S. 882, 890 (1996) (drawing
a distinction between the plan sponsor’s role as
fiduciary and its actions to adopt, modify, or terminate a
plan, where it takes on a role analogous to settlor of a
trust); Varity Corp. v. Howe, 516 U.S. 489, 498 (1996)
(noting the difference between a plan sponsor acting as
employer and a sponsor acting as plan administrator). If
a company is exercising discretionary authority over a
plan’s management or administration, Varity indicates
that the company is to that extent behaving as a fidu-
ciary. 516 U.S. at 498. Under this court’s decision in
Leigh v. Engle, a company can be a plan fiduciary when
there is evidence that it played a role in appointing the
administrators of the plan (and thus had a duty to
22                                    Nos. 07-3837 & 09-2796

choose appointees wisely and to monitor their activities).
727 F.2d 113, 134-35 (7th Cir. 1984). In addition, Leigh
suggests that a company might also act as a fiduciary
to the extent that it exercises de facto control over plan
decisions through the plan administrators that it selects.
See id. at 134-35 & n.33. Either of those activities—ap-
pointing administrators or exercising control through
appointees—falls on the plan management or administra-
tion side of the line drawn in Varity.
   Even if we assume that the Board and Motorola are
the same, however, there is no evidence in this record
that Motorola did anything more than appoint Com-
mittee members to administer the Plan. No evidence
suggests that the company exercised de facto control
over Plan decisions through those Committee members.
Thus the only serious question is whether Motorola
(technically, its Board) acted irresponsibly in its choice
of people for the Committee or in its efforts to monitor
those people. That question (Motorola’s own alleged
negligence in selecting fiduciaries) is closely related to
the issue whether Motorola might be liable to the plain-
tiffs based on the doctrine of respondeat superior. The
plaintiffs made this argument before the district court,
and they continue to press it here.
  The federal common law of agency supplies the gov-
erning principles in ERISA cases. See, e.g., Nationwide
Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992). The
doctrine of respondeat superior can be found within that
body of law. See, e.g., Burlington Industries, Inc. v. Ellerth,
524 U.S. 742, 754-65 (1998). The Fifth Circuit has held
Nos. 07-3837 & 09-2796                                     23

that a company might be liable under section 502(a)(2),
but “only when the principal actively and knowingly
participated in the agent’s breach.” Bannistor v. Ullman,
287 F.3d 394, 408 (5th Cir. 2002) (discussing American
Federation of Unions Local 102 Health & Welfare Fund v.
Equitable Life Assur. Soc. of the U.S., 841 F.2d 658, 665
(5th Cir. 1988)). The Sixth Circuit permits vicarious
liability even without a showing that the principal
played an active and knowing part in the breach.
Hamilton v. Carell, 243 F.2d 992, 1002-03 (6th Cir. 2001). See
generally Bradley P. Humphreys, Comment, Assessing
the Viability and Virtues of Respondeat Superior for
Nonfiduciary Responsibility in ERISA Actions, 75 U. C HI. L.
R EV. 1683 (2008).
   This court has implicitly recognized respondeat superior
liability in ERISA cases. In Wolin v. Smith Barney Inc., we
described a case as one in which a plaintiff had charged
that a fiduciary, “and so by the principle of respondeat
superior his employer as well,” had violated the statute.
83 F.3d 847, 859 (7th Cir. 1996), abrogated on other
grounds by Klehr v. A.O. Smith Corp., 521 U.S. 179, 193-95
(1997). In Wolin, however, we did not need to decide
how far this principle should reach. It is a knotty prob-
lem. On the one hand, ERISA is a comprehensive statute
that spells out exactly who should be liable for what;
engrafting extra common-law remedies on top of that
scheme is something that should not be done lightly.
On the other hand, we have Darden and many other
decisions telling us that ERISA must be read against the
backdrop of the common law of agency (as well as
other parts of the common law).
24                                    Nos. 07-3837 & 09-2796

   In this case, the question of Motorola’s derivative
liability, like the question whether it is directly liable
for negligent selection and monitoring of Committee
members, must be resolved only if the evidence could
support a finding of unsatisfactory performance on the
part of one or more of the fiduciaries that we will discuss
in the following section. The Restatement (Third) of
Agency describes the principle of respondeat superior
as follows: “An employer is subject to liability for torts
committed by employees while acting within the scope
of their employment.” R ESTATEMENT (T HIRD ) OF A GENCY
§ 2.04 (2006). Since we conclude below that none of the
individual defendants (acting individually or through
the Committee) is liable, we set the question of derivative
liability aside for another day, when it matters to the
outcome of a case. We will assume, for purposes of this
opinion, that Motorola is a fiduciary based on the
Board’s role in appointing Plan administrators to the
Committee.
  2. The Remaining Defendants. The remaining defendants
fall into three groups: (1) the Committee that acted as
the Plan Administrator; (2) the officers of Motorola,
some of whom were also directors; and (3) the outside
directors of the company. The most interesting question
is whether the Committee as a separate entity is a
fiduciary that can be sued. The defendants argue that
it is not, but our decision in Line Construction Benefit
Fund v. Allied Electrical Contractors, Inc., 591 F.3d 576, 579-
80 (7th Cir. 2010), points in the other direction. There
we ruled that a multiemployer plan was a fiduciary
Nos. 07-3837 & 09-2796                                        25

that could sue and be sued under section 502(a)(3),
29 U.S.C. § 1132(a)(3). We see no reason to treat an
entity like the Committee here differently, and so we
assume for present purposes that it is also a fiduciary.
(Whether the Committee has any meaningful existence
for purposes of this lawsuit apart from the people who
sit on it or Motorola itself is a separate question. Like
the question of Motorola’s derivative liability, it is one
that we need not resolve unless there is evidence that
one or more of the individual defendants breached a
fiduciary duty.)
  With the fiduciary status of Motorola and the
Committee assumed for the sake of argument, we can
turn to the individual defendants. The following table
summarizes the defendants that have been named 1 and
what the theory of liability is for each one, to the extent
we are able to tell from the record:

1
  At one point, the list of names also included William Declerck,
David Devonshire, Richard Does, Richard Engstrom, Donald
Jones, and Garth Milne. Motorola’s Rule 26.1 Disclosure
Statement, however, lists only the individual defendants set
forth in the table. The plaintiffs make no objection to that list
in their reply brief. We therefore take it as unopposed that
the additional people named in this note are no longer in
the case.
26                              Nos. 07-3837 & 09-2796

 Name             Position         Theories of
                                   Breach

 Christopher B.   CEO; Chair-      Imprudence; dis-
 Galvin           man of Board     closure; monitor-
                  during class     ing
                  period

 Carl F.          CFO; Com-        Imprudence; dis-
 Koenemann        mittee mem-      closure
                  ber

 Robert L.        COO; Board       Imprudence; dis-
 Growney          member dur-      closure; monitor-
                  ing class pe-    ing
                  riod

 Gary L. Tooker   Former CEO       Monitoring
                  and Chair-
                  man; Com-
                  mittee mem-
                  ber; Board
                  member dur-
                  ing class pe-
                  riod

 Rick Dorazil     VP of Benefits   None shown

 H. Laurance      Outside Di-      Monitoring
 Fuller           rector
Nos. 07-3837 & 09-2796                                   27

 Anne P. Jones         Outside Di-      Monitoring
                       rector

 Judy C. Lewent        Outside Di-      Monitoring
                       rector

 Walter E. Massey      Outside Di-      Monitoring
                       rector

 Nicholas              Outside Di-      Monitoring
 Negroponte            rector

 John E. Pepper, Jr.   Outside Di-      Monitoring
                       rector

 Samuel C. Scott III   Outside Di-      Monitoring
                       rector

 John A. White         Outside Di-      Monitoring
                       rector

   Under ERISA, “a person is a fiduciary with respect to
a plan to the extent (i) he exercises any discretionary
authority or discretionary control respecting manage-
ment of such plan or exercises any authority or control
respecting management or disposition of its assets, . . . or
(iii) he has any discretionary authority or discretionary
responsibility in the administration of such plan.” ERISA
§ 3(21)(A), 29 U.S.C. § 1002(21)(A). Of the people named
in the table, only Koenemann and Tooker served as
members of the Committee during the class period. Those
two are certainly covered by the statutory definition.
28                                 Nos. 07-3837 & 09-2796

Moreover, all of the inside and outside directors who
sat on the Board and in that capacity selected members
of the Committee are fiduciaries, at least to the extent
that they had obligations related to selecting and moni-
toring members of the Committee. See Leigh, 727 F.2d
at 134-35. That leaves just Dorazil. The summary judg-
ment record leaves unanswered questions about how
much of a connection he had to the administration of the
Plan. But we can imagine many scenarios in which
a company’s Vice-President of Benefits would fall
squarely within ERISA’s definition of fiduciary. For the
purposes of this case, we prefer to say that the definition
of fiduciary in ERISA section 3(21)(A) seems broad
enough to sweep in all of the defendants named by
the class. Because of the conclusions that we reach below,
we have no need to resolve the question of Dorazil’s
fiduciary status conclusively.

      B. Claims Preserved Against the Defendants
  To succeed in their suit, the plaintiffs must show
more than that the defendants were fiduciaries. They
must also present evidence that the fiduciaries breached
a duty and that the breach caused them harm. To deter-
mine whether the class has done this, we must first
check to see whether the plaintiffs have preserved a
claim against each defendant that we have identified
above. Recall that the class believes that the Plan fidu-
ciaries fell short in three respects: (1) imprudence, by
selecting and keeping the Motorola Stock Fund as a
Plan investment option; (2) failure to disclose material
Nos. 07-3837 & 09-2796                                  29

information; and (3) failure to appoint competent people
to the Committee and to monitor their activities ade-
quately.
  The person who receives the most attention in the
plaintiffs’ briefs is Koenemann, who served on the Com-
mittee during the entire class period and became its
chair at the end of 2000. He worked on the Telsim
deal from 1998 forward and knew of the problems that
were brewing. He discussed his concerns with Galvin,
Growney, and KPMG in September 2000. He was not,
however, a member of the Board, and so the class can
assert only the imprudence and disclosure theories
against Koenemann. Growney’s involvement seems
more remote, though the plaintiffs allege that he too
knew about the problems with Telsim. Galvin is in the
same position as Growney, at least in terms of specific
allegations: he knew about the Telsim problems, but
his responsibility for the selection of funds or disclosure
is unclear. Nevertheless, both Galvin and Growney were
members of the Board during the class period, and so
presumably the class is pursuing all three theories
against these two defendants.
  Tooker chaired the Committee from May 2, 2000,
until the end of the calendar year, but so far as the evi-
dence in the summary judgment record reveals, he
was unaware of the Telsim fiasco as of the time he left
the Committee. That means that Tooker cannot be liable
on the class’s prudence or disclosure theories. There
is evidence in the record, however, that Tooker was a
member of the Board until 2001, which means that
he is one of the director defendants against whom the
30                                   Nos. 07-3837 & 09-2796

plaintiffs assert their monitoring claim. Dorazil, the Vice
President of Benefits, was neither a director of Motorola
nor a member of the Committee. While he had some
responsibilities related to the Plan, it is unclear whether
he had any role in reviewing the Plan’s portfolio. In
addition, despite the plaintiffs’ statements in their briefs,
there is not a shred of evidence that would permit an
inference that Dorazil knew about Motorola’s problems
with Telsim during the class period—all of the evidence
points in the other direction. As a result, it appears that
the class has not preserved any of its three theories as
far as Dorazil is concerned. Finally, the remainder of
the defendants had no knowledge of the problems with
Telsim; the plaintiffs appear to have included them
solely for purposes of the monitoring theory.
  For the remainder of this opinion, we shall proceed
theory-by-theory. For each theory we discuss below, we
will indicate which of the individual defendants are
involved, for ease of reference. First we must outline
general ERISA principles that guide our discussion of
the defendants’ fiduciary responsibilities.

                C. General ERISA Principles
  1. Scope of Fiduciary Duty. ERISA spells out what it means
by the term “fiduciary duties” in section 404(a), 29 U.S.C.
§ 1104(a). We set that part of the statute out for ease
of reference:
     (a) Prudent man standard of care
     (1) Subject to [certain exceptions not relied upon here],
     a fiduciary shall discharge his duties with respect to
Nos. 07-3837 & 09-2796                                  31

   a plan solely in the interest of the participants and
   beneficiaries and—
       (A) for the exclusive purpose of:
           (i) providing benefits to participants and their
           beneficiaries; and
           (ii) defraying reasonable expenses of adminis-
           tering the plan;
       (B) 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 con-
       duct of an enterprise of a like character and
       with like aims;
       (C) by diversifying the investments of the plan
       so as to minimize the risk of large losses, unless
       under the circumstances it is clearly prudent not
       to do so; and
       (D) in accordance with the documents and instru-
       ments governing the plan insofar as such docu-
       ments and instruments are consistent with the
       provisions of this subchapter and subchapter III
       of this chapter.
   (2) In the case of an eligible individual account plan
   (as defined in section 1107(d)(3) of this title), the
   diversification requirement of paragraph (1)(C) and the
   prudence requirement (only to the extent that it
   requires diversification) of paragraph (1)(B) is not
   violated by acquisition or holding of qualifying em-
32                                   Nos. 07-3837 & 09-2796

     ployer real property or qualifying employer
     securities (as defined in section 1107(d)(4) and (5) of
     this title).
ERISA § 404(a), 29 U.S.C. § 1104(a). This is a prime
example of the Supreme Court’s observation in Firestone
Tire and Rubber Company v. Bruch, 489 U.S. 101, 110 (1989),
that “ERISA abounds with the language and terminology
of trust law.” The Bruch Court specifically noted that
“ERISA’s legislative history confirms that the Act’s fidu-
ciary responsibility provisions, 29 U.S.C. §§ 1101-1114,
codify and make applicable to ERISA fiduciaries certain
principles developed in the evolution of the law
of trusts.” Id. (internal quotation marks and citations
omitted). See generally JOHN H. L ANGBEIN, B RUCE A.
W OLK , S USAN J. S TABILE, P ENSION AND E MPLOYEE B ENEFIT
L AW 590-630 (5th ed. 2010). Self-dealing, conflicts of
interest, or even divided loyalties are inconsistent with
fiduciary responsibilities.
  2. Safe Harbor under Section 404(c). The statute also
delineates a “safe harbor” for plan fiduciaries; it
relieves fiduciaries of potential claims for breach of duty
for self-directed accounts in section 404(c):
     (c) Control over assets by participant or beneficiary
     (1)(A) In the case of a pension plan which provides
     for individual accounts and permits a participant or
     beneficiary to exercise control over the assets in his
     account, if a participant or beneficiary exercises
     control over the assets in his account (as determined
     under regulations of the Secretary)—
Nos. 07-3837 & 09-2796                                    33

        (i) such participant or beneficiary shall not be
        deemed to be a fiduciary by reason of such exer-
        cise, and
        (ii) no person who is otherwise a fiduciary shall
        be liable under this part for any loss, or by rea-
        son of any breach, which results from such par-
        ticipant’s or beneficiary’s exercise of control,
        except that this clause shall not apply in connec-
        tion with such participant or beneficiary for any
        blackout period during which the ability of such
        participant or beneficiary to direct the investment
        of the assets in his or her account is suspended by
        a plan sponsor or fiduciary.
ERISA § 404(c), 29 U.S.C. § 1104(c). In our decision on
rehearing in Hecker v. Deere & Co., 569 F.3d 708, 710
(7th Cir. 2009) (Hecker II), we clarified that we had no
need to decide there whether the 404(c) safe harbor
could be used to defend against claims of imprudent
fund selection for a plan. Under the facts before us, no
such claim was plausible, cf. Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007), and so we reserved that issue
for another day.
  The question has returned in the present case. The
purpose of section 404(c) is to relieve the fiduciary of
responsibility for choices made by someone beyond its
control; that is, the participant (or beneficiary—we
mean to include both in this discussion). If an
individual account is self-directed, then it would make
no sense to blame the fiduciary for the participant’s
decision to invest 40% of her assets in Fund A and 60%
34                                  Nos. 07-3837 & 09-2796

in Fund B, rather than splitting assets somehow among
four different funds, emphasizing A rather than B, or
taking any other decision. In short, the statute ensures
that the fiduciary will not be held responsible for deci-
sions over which it had no control. See Mertens v. Hewitt
Assocs., 508 U.S. 248, 262 (1993) (remarking that provisions
of ERISA “allocate[ ] liability for plan-related misdeeds
in reasonable proportion to respective actors’ power to
control and prevent the misdeeds”). The language used
throughout section 404(c) thus creates a safe harbor
only with respect to decisions that the participant can
make. The choice of which investments will be presented
in the menu that the plan sponsor adopts is not within
the participant’s power. It is instead a core decision
relating to the administration of the plan and the
benefits that will be offered to participants.
  Thus, we agree with the position taken by the
Secretary of Labor in her amicus curiae brief that the
selection of plan investment options and the decision to
continue offering a particular investment vehicle are
acts to which fiduciary duties attach, and that the safe
harbor is not available for such acts. The Fourth Circuit
came to the same conclusion in DiFelice v. U.S. Airways,
Inc., 497 F.3d 410, 418 n.3 (4th Cir. 2007). It is instead
the fiduciary’s responsibility, as the Secretary puts it, to
screen investment alternatives and to ensure that impru-
dent options are not offered to plan participants. The
regulations that the Secretary had put in place to imple-
ment the statute during the class period are consistent
with this position. The regulation implementing section
404(c) says that the fiduciaries may not be held liable
Nos. 07-3837 & 09-2796                                  35

for any loss or fiduciary breach “that is the direct and
necessary result of that participant’s or beneficiary’s
exercise of control.” 29 C.F.R. § 2550.404c-1(d)(2)(i). In
order to satisfy the requirement that the participant
have meaningful control of their plan assets, the regula-
tion requires the plan to provide sufficient information
so that participants can make informed decisions, and it
explains what must be done to satisfy that requirement.
29 C.F.R. § 2550.404c-1(b)(2)(i)(B).

            D. Particular Theories of Liability
  With those principles in mind, we are now in a position
to evaluate the three theories of liability that the Lingis
class is pursuing against the Motorola defendants. As
we explain below, we conclude that the safe harbor is not
available for the imprudence claim, but that this theory
fails on the merits. The safe harbor is available to the
defendants, however, for the plaintiffs’ disclosure and
monitoring theories. Even if it were not, the plaintiffs
have not brought forward enough evidence to prevail
on their disclosure theories, nor does this record sup-
port their inadequate monitoring theory.
  1. Imprudence. As we noted earlier, the imprudence
theory turns on the plaintiffs’ ability to show that defen-
dants Galvin, Koenemann, or Growney breached a fidu-
ciary duty. For all of the other defendants, either the
record does not indicate that they had anything to do
with choosing the investment menu that was offered
under the Plan or there is no evidence that they had any
knowledge of Motorola’s problems with the Telsim
transaction.
36                                  Nos. 07-3837 & 09-2796

   The plaintiffs’ theory is that these individual
defendants, along with Motorola and the Committee,
violated their fiduciary duties by including the Motorola
Stock Fund as one of the Plan’s investment options. It is
unclear whether they believe that the breach of duty
arose at the very moment that the Motorola Stock Fund
was designated for the Plan, or if they are arguing that
the decision not to revise the Plan and withdraw this
as an option was the violation. (The latter theory seems
more likely.) Their evidence, however, is fatally thin
(recalling, of course, that the only question before us is
whether it is enough to require the denial of summary
judgment). All they have is their expert’s ipse dixit
that Motorola stock was an imprudent option for a re-
tirement plan, a few conclusory assertions that the
Motorola Stock Fund should have been removed from
the Plan at some point, and the assertion that in
retrospect it seems that the 25% cap on the amount of
Motorola stock that could be in any one person’s
account that existed until July 1, 2000, (and that was
removed at the demand of Motorola’s employees) should
have remained in place. The plaintiffs add that there
were many warning signs that the Telsim loans were not
likely to be repaid and that the drop in the price of
Motorola stock is proof that the Motorola Stock Fund
did not belong in the Plan’s portfolio.
  This is not enough. A single plan participant directing
his or her pension account does not have a duty to di-
versify assets. See ERISA §§ 404(a)(1)(C), (a)(2) and
407(d)(3), 29 U.S.C. §§ 1104(a)(1)(C), (a)(2) and 1107(d)(3)
(describing plan fiduciary diversification duties); see
Nos. 07-3837 & 09-2796                                   37

also Steinman v. Hicks, 352 F.3d 1101, 1103 (7th Cir. 2003)
(explaining Congress’s decision to exempt employee
stock ownership plans from diversification require-
ments). Even for normal employee stock ownership
plans (“ESOPs”), courts apply a presumption of prudence
where the fiduciary in charge of the plan is directed by
the plan to invest in the company’s stock. Summers v.
State Bank & Trust Co., 453 F.3d 404, 410 (7th Cir. 2006);
Moench v. Robertson, 62 F.3d 553, 571-72 (3d Cir. 1995). The
decision of the Plan fiduciaries in the present case to
continue offering—as one option—the Motorola Stock
Fund must be evaluated against that backdrop. And in
any event, even if this were a benefit plan devoted ex-
clusively to Motorola stock, “[m]ere stock fluctuations,
even those that trend down significantly, are insufficient
to establish the requisite imprudence . . . .” Wright v.
Oregon Metallurgical Corp., 360 F.3d 1090, 1099 (9th Cir.
2004). The value of Motorola stock did not collapse in
a day, or even in a few days. Plan participants were
entitled throughout the class period—with the very
brief exception of the blackout period, during which
the stock price did not fall much at all—to move their
dollars away from the Motorola Stock Fund into a dif-
ferent fund on a daily basis; anyone concerned by the
downward trend that persisted for some time could
have done so (and it is probable that many people did).
  We have suggested before that the tension faced by
the administrators of an ESOP between protecting
against risk and establishing a portfolio dominated by
company stock is “not acute if the participants in the
ESOP have adequate sources of income or wealth that
38                                 Nos. 07-3837 & 09-2796

are not correlated with the risk of the [company]
stock . . . .” Summers, 453 F.3d at 410. The very existence
of the three other investment options (until July 1, 2000)
or eight other options (after that date), in the absence
of any challenge to any of those other funds, offers assur-
ance that the Plan was adequately diversified and no
participant’s retirement portfolio could be held hostage
to Motorola’s fortunes. Furthermore, the evidence
does not portray a situation in which Motorola was
facing imminent collapse. Cf. Moench, 62 F.3d at 572. The
volatility that Motorola stock was experiencing was
within the bounds described by the Plan documents.
Throughout the period covered by this case, Motorola
was a fundamentally sound company. Nothing should
have tipped the Plan’s fiduciaries off to the (dubious)
proposition that Motorola’s stock had become so risky
or worthless that the Motorola Stock Fund itself had
to be withdrawn from the Plan immediately. In short,
the plaintiffs have not done enough to defeat the defen-
dants’ motion for summary judgment, insofar as it relates
to the alleged imprudence of the Plan’s inclusion of the
Motorola Stock Fund as one of several investment vehicles.
     2. Failure To Disclose. The plaintiffs’ theory that
Galvin, Koenemann, and Growney failed to disclose
material information about problems with Telsim impli-
cates both the basic fiduciary duty to provide suf-
ficient information to the Plan participants and the
section 404(c) safe harbor. The plaintiffs argue that the
defendants’ concealment of the extent of Motorola’s
problems before Bloomberg News broke the story on
April 6, 2001, caused the Plan to fail to meet two require-
Nos. 07-3837 & 09-2796                                    39

ments that the defendants must satisfy in order to take
advantage of the section 404(c) safe harbor: first, it de-
prived participants of sufficient information to make
informed decisions, because it did not provide an ade-
quate description of the investment objectives and
risk/return characteristics of the Motorola Stock Fund, see
29 C.F.R. § 2550.404c-1(b)(2)(i)(B); and second, it deprived
them of the opportunity to exercise individual control
of their accounts because the Plan fiduciaries concealed
material, non-public facts related to the Motorola
Stock Fund, see id. § 2550.404c-1(c)(2)(ii).
  a. Provision of sufficient information. The governing
regulations set forth nine criteria that must be satisfied
in order to meet the obligation to provide sufficient
information to plan participants. See id. § 2550.404c-
1(b)(2)(i)(B)(1)(i)-(ix). The plaintiffs argue only that the
Plan fiduciaries failed to comply with requirement (ii),
which read (until December 20, 2010, and thus at the
relevant time):
    [A participant or beneficiary will not be considered to
    have sufficient investment information unless the
    participant or beneficiary is provided by an identi-
    fied plan fiduciary a] description of the investment
    alternatives available under the plan and, with
    respect to each designated investment alternative, a
    general description of the investment objectives and
    risk and return characteristics of each such alternative,
    including information relating to the type and diversi-
    fication of assets comprising the portfolio of the
    designed investment alternative . . . .
40                                  Nos. 07-3837 & 09-2796

Id. § 2550.404c-1(b)(2)(i)(B)(1)(ii). The question is thus
whether there is a genuine issue about the sufficiency
of the information that the Plan provided to its par-
ticipants about the Motorola Stock Fund.
  Motorola’s benefits pamphlet, its Summary Plan De-
scriptions, its Annual Reports, its benefits statements,
and an August 1, 2000, Prospectus ranked the different
funds sponsored by the Plan by risk and described the
investment strategies of each one. These documents
classified the Motorola Stock Fund as the high-risk
option. They disclosed that this fund was invested ex-
clusively in Motorola common stock, and they noted
that it was intended for long-term growth and was sus-
ceptible to substantial short-term fluctuations. The Pro-
spectus disclosed the various risks of the Motorola
Stock Fund, including market risk, nondiversification
risk, and stock risks. It acknowledged that the Motorola
Stock Fund had suffered a 25.5% loss in its worst
quarter and that year-by-year returns varied from 9.3%
to 142.2%. It is hard for us to imagine what else the
Plan fiduciaries could have told the participants that
would have provided better guidance. This information
satisfied the requirement of “a general description of the
investment objectives and risk” of the Motorola Stock
Fund.
  b. Control of assets. ERISA’s regulations also require, as
a condition for the safe harbor of section 404(c), that
participants must exercise “independent control in fact,”
not just the illusion of control. 29 C.F.R. § 2550.404c-
1(c)(1)(i). The necessary control will be lacking if the
Nos. 07-3837 & 09-2796                                  41

plan fiduciary has “concealed material non-public facts
regarding the investment from the participant or benefi-
ciary, unless the disclosure of such information by the
plan fiduciary to the participant or beneficiary would
violate any provision of federal law or any provision
of state law which is not preempted by the Act . . . .” Id.
§ 2550.404c-1(c)(2)(ii). The plaintiffs argue that the evi-
dence will support a finding that such concealment
took place here.
  The district court noted that there was no dispute that
the facts about the Telsim disaster were non-public.
The court also observed that the only people capable of
concealing these facts were those who knew about them.
As we have already discussed, the only defendants
who meet that description based on the summary judg-
ment record are Galvin, Growney, and Koenemann.
While the plaintiffs have not developed to any degree
the argument that Galvin and Growney failed to
disclose material information, we will consider all three
defendants for the sake of thoroughness.
  The parties dispute whether the information about
Motorola’s transaction with Telsim was material at all.
We agree with the district court that the Telsim
debacle’s noticeable impact on Motorola’s stock price
resolves this question in favor of the plaintiffs. When
Credit entered its deal with Telsim in 1999 and at the
start of the class period in 2000, Motorola’s stock was
selling for approximately $30 per share. By the time the
Bloomberg News story broke, the price had slid to about
half that, and that news sent the stock price down ap-
42                                  Nos. 07-3837 & 09-2796

proximately 20% in a single day. Even though the defen-
dants have presented evidence that the decline in
Motorola’s stock was statistically insignificant, and al-
though Motorola’s price per share had recovered by
the end of the class period, we think the plaintiffs have
presented enough evidence to create a genuine issue
about whether the Telsim information was material. The
Telsim risk was a major one that predictably contributed
to fluctuations in value; we can see how this informa-
tion was material to the plaintiffs’ interest and would
have changed the investment strategy of Plan par-
ticipants who had the option of shifting assets from
the Motorola Stock Fund to other investments sponsored
by the Plan.
  That leaves the question whether Galvin, Growney, or
Koenemann concealed the material, non-public facts in
question from the Plan participants. The regulations
governing section 404(c)’s safe harbor do not define
what constitutes concealment of material information,
and so the district court drew upon the more general
disclosure duty embodied in ERISA. Under the statute,
“material facts affecting the interests of plan participants
or beneficiaries must be disclosed.” Kamler v. H/N Telecom-
munication Services, Inc., 305 F.3d 672, 681 (7th Cir. 2002)
(internal quotation marks omitted). The district court’s
approach—defining the prohibition on concealment
of material information contained in the regulations
based on ERISA’s general fiduciary disclosure obliga-
tion—is sound. While the district court is correct that
this may well mean there will be no case where a defen-
dant can both breach ERISA’s fiduciary duty to disclose
Nos. 07-3837 & 09-2796                                     43

information and also take advantage of section 404(c)’s
safe harbor, we can think of no other principled way to
conceptualize the disclosure obligation embodied in the
regulations; nor, for that matter, do we see why the
disclosure required of Plan fiduciaries under ERISA
generally should be different than that required in order
for fiduciaries to take advantage of section 404(c).
  A violation of ERISA’s disclosure requirement, which
arises under the general fiduciary duties imposed by
ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1), requires evidence
of either an intentionally misleading statement, or a
material omission where the fiduciary’s silence can be
construed as misleading. See Hecker v. Deere & Co., 556
F.3d 575, 585 (7th Cir. 2009) (Hecker I) (citing Varity Corp.,
516 U.S. at 505; Anweiler v. American Elec. Power Serv. Corp.,
3 F.3d 986, 992 (7th Cir. 1993)). The plaintiffs do not
point to any intentionally misleading statement issued
by Galvin, Koenemann, or Growney. To the extent
that they argue that the defendants negligently misrep-
resented information about Telsim in their SEC filings,
that negligence would not be enough to show a violation
of ERISA’s disclosure duty. See Vallone v. CNA Financial
Corp., 375 F.3d 623, 642 (7th Cir. 2004) (“[W]hile there is
a duty to provide accurate information under ERISA,
negligence in fulfilling that duty is not actionable.”).
Contrary to the plaintiffs’ position (and to the position
of other circuits, e.g., Pfahler v. National Latex Prods. Co.,
517 F.3d 816, 830 (6th Cir. 2007); Mathews v. Chevron Corp.,
362 F.3d 1172, 1183 (9th Cir. 2004)), this court has
required some deliberate misstatement before it finds a
violation of the ERISA duty to disclose material infor-
44                                  Nos. 07-3837 & 09-2796

mation, e.g., Brosted, 421 F.3d at 466; Beach v. Common-
wealth Edison Co., 382 F.3d 656, 658-59 (7th Cir. 2004).
“But this does not mean that the duty to convey com-
plete and accurate information is toothless. . . .
[A]lthough negligent misrepresentations are not them-
selves actionable, the failure to take reasonable steps to
head off such misrepresentations can be actionable.”
Kenseth v. Dean Health Plan, Inc., 610 F.3d 452, 470-71 (7th
Cir. 2010). A plaintiff may introduce evidence that a
fiduciary breached the duty to disclose by committing
some material omission that is misleading and action-
able under the statute.
   But the plaintiffs have not introduced sufficient evi-
dence of that sort of omission by Galvin, Koenemann,
or Growney. We have required more than this record
reveals. For example, we have found a breach of fiduciary
duty stemming from a failure to disclose an integral part
of the plan. See Anweiler, 3 F.3d at 991-92 (finding
that defendants breached their fiduciary duties by
failing to disclose that a reimbursement agreement
related to an employee’s life insurance was revocable
at will and that the employee was not required to sign
it). Similarly, we found a breach when the fiduciary
withheld information about the actual value of plan
assets when employees are required to make a choice
about a payout under the plan. See Solis v. Current De-
velopment Corp., 557 F.3d 772, 777-78 (7th Cir. 2009).
Whatever omissions occurred here are not comparable.
As the district court noted, there is no support for the
view that Plan fiduciaries were required to provide all
information about Motorola’s business decisions in
real time to Plan participants; and the fact that the
Nos. 07-3837 & 09-2796                                   45

Telsim deal was a bad business decision is not enough
to make the omission of information a violation of
ERISA. We can think of at least one problem that such a
rule might create: insider trading. The following portion
of our discussion in Rogers v. Baxter International, Inc. is
relevant here:
    Perhaps the defendants in this litigation did have
    inside information, but could they use it for plain-
    tiffs’ benefit? Plaintiffs’ position seems to be that
    [plan fiduciaries] are obligated to adopt a policy
    under which employees invest in a stock during
    periods of good news for the issuer but not during
    periods of bad news. The implication is that someone
    else (which is to say, investors at large) must bear
    the loss when bad news is announced, because the
    [plan participants] will have bailed out. Corporate
    insiders cannot trade on their own behalf using
    private information, good or bad.
521 F.3d 702, 706 (7th Cir. 2008). It is enough to say for
present purposes that the class has presented no good
argument or evidence that Galvin, Koenemann, or
Growney misled Plan participants and violated ERISA
by failing to inform them about the problems with
Motorola’s deal with Telsim in a more timely fashion.
  Our conclusion that the defendants did not violate the
general disclosure duty embodied in ERISA means that
they also complied with the section 404(c) regulations
concerning concealment of material, non-public facts
about the Motorola Stock Fund. Accordingly, we agree
with the district court that the defendants are entitled
46                                 Nos. 07-3837 & 09-2796

to take advantage of the section 404(c) safe harbor and
thus that they are entitled to summary judgment on the
plaintiffs’ disclosure theories.
  3. Failure To Monitor. Our conclusion that the de-
fendants satisfied the Department of Labor’s regulations
for plans administered under ERISA section 404(c) and
thus are entitled to take advantage of section 404(c)’s
safe harbor applies with equal force to the plaintiffs’
monitoring theory. The plaintiffs allege that Motorola
Board members violated fiduciary duties imposed by
ERISA by failing to appoint competent Committee mem-
bers to run the Plan and by neglecting their duty to moni-
tor Committee members and provide them with
needed information. The plaintiffs’ argument is specific:
they say that “appointing fiduciaries must continually
monitor their appointees.” They press their theory
against every individual defendant who served as either
an inside director or an outside director of Motorola. We
agree with the district court that the defendants are
entitled to take advantage of section 404(c)’s safe harbor
on this claim. Even if there were no statutory safe
harbor, however, it is worth noting that the plaintiffs’
argument that summary judgment was not warranted on
this point borders on frivolous. There is no doubt that
those who appoint plan administrations have an
ongoing fiduciary duty under ERISA to monitor the
activities of their appointees. Leigh, 727 F.2d at 134-35.
The Department of Labor has elaborated on this duty:
     At reasonable intervals the performance of trustees
     and other fiduciaries should be reviewed by the
Nos. 07-3837 & 09-2796                                   47

    appointing fiduciary in such manner as may be rea-
    sonably expected to ensure that their performance
    has been in compliance with the terms of the plan
    and statutory standards, and satisfies the needs of the
    plan. No single procedure will be appropriate in
    all cases; the procedure adopted may vary in accor-
    dance with the nature of the plan and other facts and
    circumstances relevant to the choice of procedure.
29 C.F.R. § 2509.75-8 at FR-17 (Department of Labor
questions and answers). The duty exists so that a plan
administrator or sponsor cannot escape liability by
passing the buck to another person and then turning a
blind eye. There is no evidence that anything like that
occurred here. Plan procedures required annual renewal
of appointments to the Committee, periodic reports by
the Committee to the Board, and outside auditing of
the Plan by KPMG. There is no evidence about how
many reports were produced for the Board or what
resulted from annual reviews of the Committee by the
directors because the plaintiffs have not put anything on
the subject into the record. The plaintiffs essentially ask
us to recognize a duty to monitor that would require
every appointing Board member to review all business
decisions of Plan administrators. As the district court
rightly pointed out, that standard would defeat the pur-
pose of having trustees appointed to run a benefits plan
in the first place. Even if the defendants were not
entitled to take advantage of the section 404(c) defense
to the plaintiffs’ monitoring claim, the plaintiffs read the
duty outlined in Leigh much too broadly, and their claim
would fail on the merits. The district court correctly
48                                 Nos. 07-3837 & 09-2796

granted summary judgment to the defendants on this
theory.
                           IV
   In conclusion, we wish to emphasize what we are,
and are not, holding in these cases. There are indeed
some fiduciary duties that arise in connection with a
company’s choice of investment vehicles for a defined-
contribution plan. The present cases, however, reach us
after all parties have had a chance to develop the record
for purposes of summary judgment. It was the plain-
tiffs’ burden in each case to show that genuine issues
of material fact remain that warrant a trial. We con-
clude, for the reasons we have given here, that neither
Howell (because of the release he signed) nor the
Lingis class have succeeded in doing so. We therefore
A FFIRM the judgments of the district court.

                         1-21-11