The Department of Labor (DOL) says it filed the suit on behalf of participants in the Wheeling Corrugating Company Retirement Security Plan and the Salaried Employees’ Pension Plan of Severstal Wheeling Inc. The department seeks to correct fiduciary breaches by the plans’ investment manager and plan administrator, which caused the plans to sustain losses and lost earnings in excess of $7 million.
“This case underscores the department’s commitment to hold fiduciaries accountable when we believe they have failed to meet their obligation to protect plan assets,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi.
An investigation conducted by the department’s Employee Benefits Security Administration (EBSA) found that from Nov. 3, 2008, through May 19, 2009, the plans’ assets were imprudently invested by the plans’ fiduciaries, including the Severstal Wheeling Inc. Retirement Committee. Specifically, the DOL suggests committee members Michael DiClemente and Dennis Halpin—and WPN Corp. and its owner Ronald LaBow, who had been hired as the plans’ investment manager—committed the breaches.
The suit also alleges that the retirement committee and its members failed to properly oversee the plans and monitor the actions taken by WPN and LaBow.
Filed in the U.S. District Court for the Western District of Pennsylvania, the suit seeks to order the defendants to restore to the plans all losses, including interest or lost opportunity costs, caused by their fiduciary misconduct. It also seeks to remove the retirement committee as fiduciaries for the plans and appoint an independent fiduciary with authority to manage the plans. The plans previously terminated their relationship with WPN and LaBow.
The case resulted from an investigation conducted by EBSA’s Philadelphia Regional Office. The department’s Regional Office of the Solicitor in Philadelphia is litigating the case.
The civil action was filed as Perez v. WPN Corp., et al. More information is available at www.dol.gov/ebsa.