Compliance June 7, 2003

DOL Takes Advisor To Task For Excessive Trades

July 30, 2001 (PLANSPONSOR.com) - The Department of Labor has sued Emerald Capital Management and its president, William Goodhue, for violating ERISA by "imprudently making excessive securities trades" with the assets of numerous employee benefit plan clients.
Reported by

The Rochester, New York-based firm, now dissolved, had been an advisor to the plans through April 1997.

Churn-Around

According to the lawsuit, the defendants made excessive trades in plan accounts resulting in annual turnover of assets in excess of 1,000%. The plans paid commissions on these trades, which in turn “substantially” benefited the defendants, according to the DOL.

The lawsuit, filed in federal district court in Rochester, seeks a court order to require that the defendants restore to the plans the amounts of assets which the defendants cost the plans in excessive commissions, plus interest.

The case resulted from investigations by the Boston Regional Office of the department’s Pension and Welfare Benefits Administration into alleged violations of ERISA.

In a press release, James M. Benages, director of PWBA’s Boston Regional Office said, “Employers and workers can reach us at (617) 565-9600 for help with any problems relating to private-sector pension and health plans.”

– Nevin Adams                     editors@plansponsor.com

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