The U.S. Department of Labor today brought suit against the trustees of seven union-sponsored pension and health plans in Ohio and Minnesota, alleging violations under ERISA for imprudently investing plan assets in risky private placement investments with Capital Consultants LLC. The DOL is alleging:
- That between 1995 and 2000, the trustees allegedly authorized increasing investments of plan assets in private placement investments, despite warnings by the plans’ investment advisors about the illiquid nature, unacceptable collateral and risks associated with the investments.
- That for two of the plans, the trustees failed to adequately monitor or to retain experts qualified to monitor investments made in the private investments by CCL.
The department is seeking court orders to require that defendants restore to the plans any losses and illegal gratuities received by them and to institute new plan procedures and controls relating to plan investments