>According to a news release from the DoL, the department had sued trustees from 33 union plans in Arizona, California, Colorado, Idaho, Minnesota, Nevada, Ohio, Oregon, and Utah for their authorization of imprudent investments in the investment management firm (S ee DoL: Union Plan Trustees “Imprudent” With CCL Investments ). The settlement tops $4.3 million in restitution for participants in the affected plans.
>The settlement includes provisions to bar certain trustees from serving as fiduciaries for a number of years because of their alleged acceptance of gratuities from Capital Consultants, according to the release. Another investment advisor has been barred for life from being a fiduciary for an Employee Retirement Income Security Act (ERISA) retirement plan. Other guidelines have been implemented at the affected plans to govern future selection of investment managers.
“Capital Consultants and plan fiduciaries betrayed the men and women whose benefit plans they were entrusted with,” said US Secretary of Labor Elaine Chao in the announcement. “The department’s legal actions in these cases will restore more than $4.3 million in lost assets to pay benefits to thousands of union workers.”
>The settlement covers eight separate lawsuits brought against trustees alleging violation of ERISA fiduciary duties.
>Many lawsuits have been launched over the Capital Consultants affair. On Tuesday, three Oregonpension funds sued their insurers and brokers for not covering their losses due to the Capital Ponzi scheme (See Oregon Pensions Sue Insurers, Brokers over Bonding Policy ). The Ponzi scheme referenced in the suit involves Capital, run by Jeffrey Grayson and his son Bradley, who engineered a $450 million scheme, according to the report. Both men have been charged with multiple crimes; however, the senior Grayson suffered a stroke before his case was concluded.
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