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Tue July 24, 2012
Federal court reinstates lawsuit over Flagstar stock
Some current and former employees will get another chance to pursue a lawsuit against Flagstar Bank over company stock in their retirement accounts.
A federal appeals court has reinstated the case in Detroit federal court. The Troy-based bank is blamed for offering Flagstar stock to employees at a time when the bank was in perilous shape.
Flagstar's stock price lately has been under a dollar, compared with nearly $15 in 2007. The court says the lawsuit raises a "plausible claim" that Flagstar breached its fiduciary duty to employees during that time.
The bank has said workers made their own investment decisions.
Flagstar recently announced its first profitable quarter since 2008. It has 111 branches in Michigan.