Intel Loses SCOTUS Investment Fund Case

The U.S. Supreme Court ruled unanimously in favor of former Intel employee Christopher Sulyma, who claimed the Intel Corporation Investment Policy Committee was not prudent with his funds based on the number of investments in hedge funds and private equity. Intel argued that since they had sent notice of his investments, the suit needed to be filed within the first three years of those investments. Sulyma countered he did not know within the first three years that his investments were performing badly. The decision of the Supreme Court affirmed the previous ruling in the 9th Circuit Court.

Sulyma was represented by Gupta Wessler and Intel Corporation Investment Committee was represented by Munger, Tolles & Olson.

Arguments for the case were heard in the Supreme Court in December of 2019. “I must say, I don’t read all the mailings that I get about my investments,” Justice Ruth Bader Ginsburg said during the arguments.

The Employee Retirement Income Security Act typically gives a person six years to file a suit if they believe those managing their investment accounts are not being prudent, however, the window is shortened to three years if the person has “actual knowledge” of what is happening with their investments. Intel alleged that Sulyma had actual knowledge of the investment. The Supreme Court ruled that the notice being sent did not necessarily prove Sulyma had actual knowledge.

Sulyma worked for Intel from 2010 to 2012 and he filed his suit in October of 2015, more than three years after the time he worked at Intel. Sulyma argued that although he did receive information about where his funds were invested, he was unaware they were invested in hedge funds and private equity or that they were performing poorly.

“Although ERISA does not define the phrase ‘actual knowledge,’ its meaning is plain,” said Justice Samuel Alito in the court opinion, “to have “actual knowledge” of a piece of information, one must in fact be aware of it.”

The opinion further stated, “Nothing in this opinion forecloses any of the ‘usual ways’ to prove actual knowledge at any stage in the litigation … Plaintiffs who recall reading particular disclosures will, of course, be bound by oath to say so in their depositions.  On top of that, actual knowledge can be proved through “inference from circumstantial evidence.”