Lexington Securities, Inc., of Chicago,
Ill., was ordered to pay $17,597 into a trust account to reimburse participants
of the corporations profit sharing plan, in a consent judgment and order
obtained by the U.S. Department of Labor.
The judgment and order also appointed John R.
OBrien, an Illinois attorney, as custodial trustee to administer the
account by distributing its funds to the eligible plan participants, and
provided that Lexington Securities, Inc., pay all fees and expenses charged by
OBrien in connection with his duties as custodian of the trust
account.
The actions resulted from a November 1998 lawsuit
filed against Lexington Securities, Inc., by the Labor Department alleging that
the corporation and its plan fiduciary, Paul Maton, withheld voluntary
contributions from employees paychecks from May 1, 1995, through June 31,
1995, but failed to deposit them into the plans investment accounts. Such
an action violates provisions of the Employee Retirement Income Security Act
(ERISA), which prohibits either direct or indirect transactions between an
employee benefit plan and any related party in which the party benefits at the
expense of the plan participants.
The $17,597 payable by Lexington Securities
represents $12,609 in principal and $4,988 in lost opportunity costs owed to
the plan participants. It is payable no later than 90 calendar days following
entry of the consent judgment and order.
The consent judgment and order resulted from an
investigation by the Chicago Regional Office of the Pension and Welfare
Benefits Administration into violations of ERISA. It was entered in the federal
district court in Chicago, Ill., on June 8.
Herman v. Lexington Securities, Inc., et al
Civil Action No. 98-C-7180 |