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Release Date: October 3, 2006
Release Number: 06-1685-BOS
Contact Name: Peter Hong/Gloria Della
Phone Number: 202.693.4676/202.693.8664
Boston, Massachusetts - The U.S. Department of
Labor has obtained settlements in which Circle Trust Company (CTC) of
Darien, Connecticut, Trust Advisors LLC, and certain corporations and
individuals agreed to restore more than $8.8 million to 1,500 pension
plans nationwide. The settlements relate to pension plan investments in
Trust Advisors Stable Value Plus Fund (SVF), a collective trust
administered by CTC. Circle Trust also agreed to allow a $10 million
priority proof of claim in its receivership proceedings. CTC was placed
in receivership on September 30, 2005, by the Connecticut Banking
Commission.
“The defendants in this case jeopardized millions
of dollars in workers’ retirement benefits,” said U.S. Secretary of
Labor Elaine L. Chao. “The department aggressively pursued justice for
these workers and their families, recovering $8.8 million in retirement
assets for their pension plans as well as levying a nearly one million
dollar civil fine.”
Under the settlement agreements, Trust Advisors of
Westport, Connecticut, and certain corporations and individuals
affiliated with the firm, have also paid a separate civil monetary
penalty of $886,364 to the federal government.
The settlements resolve a Labor Department lawsuit,
filed in U.S. District Court for the District of Connecticut, that
alleged CTC violated its duties as a fund trustee under the Employee
Retirement Income Security Act (ERISA). The corporation allegedly, among
other things, caused SVF to invest in a number of speculative and
imprudent investments that resulted in millions of dollars in losses to
the trust fund. The investments were based on the recommendations of
Trust Advisors LLC. On September 30, 2005, an independent fiduciary
appointed on behalf of SVF filed a petition seeking bankruptcy
protection for the SVF. On the same day, the Connecticut Banking
Commissioner was appointed as the receiver of CTC.
The Labor Department’s legal action resulted from
an investigation conducted by the Boston regional office of the
department’s Employee Benefits Security Administration (EBSA). In
fiscal year 2005, EBSA achieved record monetary results of $1.7 billion
related to the pension, 401(k), health and other benefits for millions
of American workers and their families. Employers and workers can
contact the Boston regional office at 617.565.9600 or EBSA’s toll-free
number, 1.866.444.EBSA (3272), for more information on the requirements
of ERISA or for help with problems relating to private-sector pension
and health plans. Additional information can be found at www.dol.gov/ebsa.
(Chao v Circle Trust Company)
Civil Action Number: 3:05-CV-01679-JCH
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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