According to a DoL news release, CSG has already paid $277,802.78 and agreed to pay a $27,780 in civil penalty. After an investigation by the Atlanta Regional Office of the department’s Employee Benefits Security Administration (EBSA) into alleged violations of ERISA by CSG, David Meals, the firm’s former chief compliance officer, and affiliated Trading Services Group Inc., the EBSA alleged the defendants received undisclosed and unauthorized compensation, and failed to timely provide promised commission rebates to certain ERISA plans from 2002 to 2006.
In addition to restitution, the settlement agreement requires full disclosure of compensation and potential conflicts of interest by CSG in all contracts with employee benefit plans governed by ERISA, the news release said. CSG must provide specific information describing all compensation received by CSG and its affiliates from any source, how the compensation is determined, and whether CSG or any affiliate acquired a financial interest in any transaction to be entered into with ERISA plans.
The firm also agreed to refrain from making misrepresentations in marketing materials, and Meals agreed to refrain from serving as a compliance officer or in a fiduciary capacity.
In addition, the settlement calls for procedures to ensure that recordkeeping by CSG for ERISA plans is accurate, and invoices provided to plans correctly reflect services provided and the total cost to the plans.
“Our settlement requires that plan fiduciaries receive full and accurate disclosure of all compensation received by their investment advisers so that the plans pay no more than reasonable compensation for their services. Those who provide investment advice to plans must act with undivided loyalty to the plan and its participants.” said Alan D. Lebowitz, EBSA’s deputy assistant secretary, in the announcement.