On Monday, December 15, 2025, Law360 reported that U.S. District Judge Richard G. Stearns of Massachusetts recused himself from an Employee Retirement Income Security Act (ERISA) lawsuit against BDO USA and its executives. The lawsuit, filed by BDO employee Tristin Taylor in January, alleges that BDO’s private company stock was overvalued in a $1.3 billion deal and that the company breached its fiduciary duty to its employees.
Judge Stearns cited his wife’s financial interest in State Street Global Advisors Trust Co. as the reason for his recusal. While State Street is not a defendant in the case, Judge Stearns noted that the company would likely be involved if the case proceeds to trial, as outlined in his electronic order filed on Friday.
The proposed class action, detailed in an amended complaint from September, claims that State Street was not fully informed about an internal company initiative to push through the stock deal, which allegedly overvalued the stock to benefit company leadership. Judge Stearns stated that his wife holds a substantial number of State Street shares in her retirement account due to her former executive position at State Street Bank.
According to Judge Stearns, federal law requires disqualification when a judge or their spouse owns stock in a company related to a dispute. He emphasized that State Street’s potential role as a “material nonparty witness” and the possible impact of the case’s outcome on his wife’s financial interests necessitated his recusal. He also noted State Street’s reputational interest in the case, given the allegations that it may have failed to properly evaluate the stock sold by BDO to the ESOP.
Following Judge Stearns’ recusal, the case has been reassigned to U.S. District Judge Denise J. Casper and U.S. Magistrate Judge Donald L. Cabell, pending any referral orders.
Source: Law360
