Disclosure obligations for Employer stock alternative

[Guest Lisha]

What are the required disclosure obligations to participants investing in Employer stock as only one of the alternative investments in a 401(k) plan. For example, under the Securities Act, participants must receive prospectuses of investments in a mutual fund. Are there similar obligations to participants who are investing in ER stock?

At this point, I don't believe there are, but I would like some confirming info., if someone would be so kind.

[Kirk Maldonado]

Yes, if employee money is being used to purchase employer stock, the sale of those shares must be registered with the SEC, unless there is an available exemption. The registration requirements impose extensive disclosure obligations, which overlap somewhat those required by ERISA.