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Lawsuit Alleges Fiduciary Breach Under ERISA

A class-action lawsuit was filed last week alleging breach of fiduciary duty resulting from excessive record-keeping fees and use of proprietary investment funds. The suit, Pledger et al. v. Reliance Trust Co. et al., targets the fiduciaries of the Insperity 401(k) Plan for allegedly causing participants to pay excessive fees to the plan record keeper, Insperity Retirement Services. The complaint further alleges that Insperity and Reliance Trust Co., the plan's discretionary trustee, breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 by offering funds with high expenses and poor performance, including proprietary mutual funds and collective investment trusts offered by Reliance. Insperity also failed to adequately monitor Reliance, a fiduciary responsible for investment selection in the plan. “We allege that Insperity and Reliance Trust together operated the plan for their own self-interest, sending excessive record-keeping fees to Insperity's in-house record keeper,” said one of the plaintiffs' attorneys. “Reliance Trust was a fiduciary responsible for investment selection and [...]

By |December 28th, 2015|Press Releases & News|
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Hedge Fund Manager Acquitted Of Inside Trading

A federal jury in Atlanta acquitted Steven E. Slawson, a New Jersey hedge fund manager, who had allegedly made illicit profits from sneak previews of financial results of Carter's Inc., an Atlanta-based clothier, before they were released. He was acquitted of thirty-four counts of insider trading. “This case was another example of the government overreaching in insider trading cases," said Slawson's attorney. "My client was at the end of a chain of information, and he had no idea that other people in the beginning of the chain were stealing confidential information. Luckily, the jury understood this and acquitted him of all counts, avoiding a wrongful conviction of an innocent man.” Prosecutors from Atlanta's U.S. Attorney's Office had accused Slawson of using information on Carter's financial results in trades for more than five years. Two ex-Carter's executives were convicted of insider trading and sentenced to terms in federal prison and ordered to pay more than $1.7 million in related cases. If [...]

By |August 20th, 2015|Press Releases & News|
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FSC Securities To Pay $1.28M In Ponzi Case

FSC Securities will pay a $1.28 million arbitration award to investors who were defrauded by Aubrey Lee Price, who had feigned his death in 2012 to avoid being investigated for his $40 million Ponzi scheme. FSC, a broker-dealer in the AIG Advisor Group, was alleged by 8 investors to have failed to supervise a number of unnamed brokers, who sold the investors "unspecified fraudulent securities as part of a Ponzi scheme," according to FINRA's arbitration award. John Chapman, lawyer for the investors, claimed that Price and two ex-FSC brokers solicited investments in the primary vehicle for the scheme, which was called the PFG fund. In an investigation by the FBI, the bureau found that Price started making risky investments in 2009, after he had left FSC. Chapman claims that two FSC advisers pushed client money into the PFG fund, both of whom eventually left FSC. “FSC did a really bad job paying attention and supervision. [sic] They were asleep at the [...]

By |August 17th, 2015|Broker Check, FINRA, Fraud, Press Releases & News|
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SEC Charges Atlanta Firm With Fraud Over Public Pension Funds

The SEC filed fraud charges against an Atlanta-based investment firm and two of its executives for their handling of the city's pension funds for police, firefighters, transit workers, and other employees. According to the SEC, Gray Financial Group Inc. placed public pension funds into an investment that did not adhere to state law and collected over $1.7 as a result. The group, its and founder and president, Laurence Gray, and co-Chief Executive Officer Robert Hubbard IV allegedly breached their fiduciary duties by soliciting investments in an alternative fund called GrayCo Alternative Partners II LP. The group's attorney responded by stating that the "claims and arguments in the SEC's filing today are without merit." The SEC claims that the investments violate Georgia law because they did not have at least four other investors and did not have a minimum of $100 million in assets. Also, a Georgia public pension fund's investment is limited to no more than twenty percent of the [...]

By |May 22nd, 2015|Press Releases & News, SEC|
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