An investigation by the department’s Employee Benefit Security Administration established that Housman, acting as the sole fiduciary to the employee pension plan, violated the Employee Retirement Income Security Act (ERISA) by mismanaging plan assets resulting in $617,839 in losses to the plan. The judgment requires Housman to restore all losses caused to the plan, less his share.
Investigators found Housman breached his fiduciary responsibilities to act solely in the interest of the company’s money purchase pension plan and its participants when he made prohibited transactions to benefit the company. Over a period of three years, Housman authorized 41 separate loans totaling $496,000 from the plan to the company. The loans, which were not repaid, were used to cover operational expenses, including payroll. The plan also lost $122,000 in estimated interest, which Housman had guaranteed to be included upon repayment of the loans.
The consent judgment and order binds Housman to restoring $363,913 in losses to the remaining plan participants. To ensure repayment, Housman must attempt to secure a life insurance policy that provides no less than $150,000 and names the plan as the sole beneficiary. Housman will no longer serve as the plan fiduciary and is permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan. Jeanne Bryant of Receivership Management Inc. has been assigned as independent fiduciary and will administer the plan. Housman must also report his financial status annually to the department until plan losses are fully restored.
Twelve Signs was a private corporation incorporated in California in 1967, which published the print magazine Starscroll. The company ceased operating in 2009 and filed for Chapter 11 bankruptcy protection in January 2010.