>In addition to the restitution that was recovered in the private litigation, the settlement, originally announced in July (see DOL Strikes Global Crossing Deal ), prohibits the company’s executives from acting as fiduciaries to ERISA-covered benefit plans for five years unless the Department of Labor gives prior approval.
>The settlement covers the two former inside directors of Global Crossing, Thomas Casey (former chief executive officer) and Gary Winnick (former chairman of the board), as well as the three former members of the Employee Benefits Committee, Dan J. Cohrs, Joseph Perrone, and John Comparin. The Secretary of Labor entered into the settlement with Global Crossing’s former officers and directors in connection with the private class action lawsuit filed on behalf of the plan participants.
>In announcing the approval, Secretary of Labor Elaine Chao said, “The court’s approval of this settlement restoring millions to pay retirement benefits is a victory for workers, retirees, and their families who are covered by the Global Crossing 401(k) plan. This year, the Administration achieved monetary results totaling $3.1 billion for retirement, 401(k), health, and other programs.”
Global Crossing workers in March 2002 claimed the plan was still accumulating Global stock at a time when the company was coping with financial p lems and the shares’ value was plummeting. The suit, filed in March 2002, alleged that company officials breached their fiduciary duty by not properly disclosing the firm’s true financial p lems and by not warning participants about the potential risks of overaccumulating company stock (see Global Crossing Workers File Company Stock Suit ). Another employee suit was filed in February of that year (see Participants Bring Another Company Stock Complaint ).
>The settlement resolves the Labor Department’s investigation of the Global Crossing Retirement Savings Plan. The department’s EBSA regional office in Los Angeles and the Office of the Solicitor conducted a comprehensive investigation of Global Crossing’s ERISA plans. The investigation was coordinated through President Bush’s Corporate Fraud Task Force.