Capital’s nearly $500 million in losses bilked an estimated 100,000 ERISA plan beneficiaries in almost 50 states out of their retirement savings and depleted funds for health benefits, according to the allegations against Capital.
According to a media release from lead plaintiffs’ counsel Stephen English of the firm Bullivant Houser Bailey PC, US District Judge Garr King of the District of Oregon issued the settlement approval order last week, giving the green light to Receiver Tom Lennon to begin parceling out the $300 million and other recovered assets.
The settlements will return approximately 60% of the at-risk investments. Settlements were approved by counsel for all parties (64 attorneys), 184 individuals and entities on behalf of plaintiffs, and 68 individuals and entities on behalf of settling defendants, the Bullivant media release said.
Capital Consultants of Portland, Oregon, was accused by the US Securities and Exchange Commission (SEC), among other things, of running a Ponzi scheme with client funds to make interest payments to clients who invested in a failed loan Capital made to Wilshire Credit Corp.
According to court records, Capital Consultants had $927 million under management when federal regulators seized its assets in September 2000. The court records said about $407 million of Capital’s high-risk investments – many now virtually worthless – came from Taft-Hartley and other union plans.
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