$300,000 Settlement With Memphis Pension Consultants
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Thursday, March 12, 2009 |
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The
U.S. Department of Labor has obtained a settlement agreement with
Consulting Services Group (CSG) of Memphis, Tenn., and its affiliated
broker-dealer providing for restitution to plan clients as well as
implementation of reforms and disclosures on compensation and fee
arrangements with plan clients in the future. CSG already has paid
$277,802.78 and agreed to pay a $27,780 in civil penalty.
The
settlement agreement requires full disclosure of compensation and
potential conflicts of interest by CSG in all contracts with employee
benefit plans governed by the Employee Retirement Income Security Act
(ERISA). Under the agreement, 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 David Meals, the
firm's former chief compliance officer, 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.
The
settlement is based on an investigation by the Atlanta Regional Office
of the department's Employee Benefits Security Administration (EBSA)
into alleged violations of ERISA by CSG, Meals and affiliated Trading
Services Group Inc. The defendants allegedly received undisclosed and
unauthorized compensation, and failed to timely provide promised
commission rebates to certain ERISA plans from 2002 to 2006.
Alan
D. Lebowitz, EBSA's deputy assistant secretary, said, "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."
The case was
conducted by EBSA's Atlanta office as part of the agency's
Consultant/Adviser Project, about which information is available at
http://www.dol.gov/ebsa/erisa_enforcement.html. Employers and workers
may contact the Atlanta office at 404-309-3900 or toll-free at
866-444-3272 for help with problems relating to private sector pension
and health plans.
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