SBC Communications Inc. agreed to pay $10 million to settle a suit brought by employees who said the company lost $635 million in their retirement funds by selling shares in a wireless carrier before it was acquired by Vodafone Group.
The suit, filed in April 2000, claimed that the local phone company should have known a bidding war would start over AirTouch Communications Inc. after the company sold its employees' 401(k) shares in AirTouch in 1998, when shares were $52.25. About a year later, AirTouch shares reached $107.66 when Vodafone acquired the wireless carrier.
The settlement allows SBC employees whose 401(k) funds were invested in AirTouch as of Dec. 31, 1997, to collect about 60 cents a share in compensation, according to the proposed settlement filed in U.S. District Court in Los Angeles.
San Antonio-based SBC, which said it didn't profit from the stock conversion, has argued that it gave its employees months of notice and five investment choices for converting AirTouch stock.