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Boston, Massachusetts - Charles J. Mailman and
Chasma Scientific Inc., Cambridge, Massachusetts, will restore $130,000 to
the company’s profit sharing plan to resolve a U.S. Labor Department
lawsuit alleging violations of the Employee Retirement Income Security Act
(ERISA).
Under the court order, Mailman agreed to repay $130,000
to the plan; the company will ensure that the restitution is allocated to
the accounts of all eligible plan participants, except Mailman. He also
will appoint a successor trustee and administrator and will be permanently
barred from serving in a fiduciary capacity to any plan governed by ERISA.
The department sued the defendants for violating their
fiduciary duties between January 1, 1997 and December 31, 2000. Mailman,
as trustee, allegedly failed to obtain appropriate execution prices for
plan investment transactions, causing the plan to pay needlessly high
costs. He also failed to follow an appropriate and prudent investment
strategy, resulting in losses to the plan. Chasma Scientific, the plan
sponsor, failed to take any actions to ensure that plan expenses and costs
were reasonably defrayed and minimized.
“Plan trustees have an obligation to prudently assess
the costs paid for plan investments and to follow the investment strategy
of the plan,” said Ann L. Combs, assistant secretary for employee
benefits security.
This case was investigated by the Boston regional
office of the Employee Benefits Security Administration (EBSA). Any
individuals who participated in the plan between January 1, 1997 and
December 31, 2000, who have not been contacted about restitution, should
call the regional office at 617.565.9600. Employers and workers seeking
help with problems relating to private-sector retirement and health plans
may also contact that office through EBSA’s toll-free number,
1.866.444.EBSA (3272).
In fiscal year 2004, EBSA achieved record monetary
results of $3.1 billion related to the pension, 401(k), health and other
benefits of millions of American workers and their families.
(Chao vs. Mailman)
Civil Action File Number: 05-CV-11744 |
