Compliance June 21, 2017

EBSA Secures Judgement Following Criminal Prosecution

The plan sponsor in the case was criminally prosecuted and pled guilty to embezzlement in June 2016.
Reported by

The Department of Labor’s Employee Benefits Security Administration (EBSA) has secured a judgement and consent order against Andrea Lynn McCarthy and Lisa Hall, and the Truss Systems LLC Profit Sharing Plan, for violations of the Employee Retirement Income Security Act (ERISA).

By way of background, the U.S. Secretary of Labor last year filed a complaint, based on an EBSA investigation, alleging that McCarthy improperly withdrew $111,624 from the profit sharing plan between January 28 and June 6, 2009. McCarthy was subsequently criminally prosecuted, and pled guilty to embezzlement in June 2016. She was ordered to make restitution to restore losses to the plan.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The formal resolution secured by EBSA orders the defendants to pay, on or before July 21, 2017, $25,253 and pre-judgment interest to reflect the lost earnings and post judgment interest for which McCarthy and Hall are jointly and severally liable. Truss Systems, McCarthy and Hall are also permanently enjoined from acting as a fiduciary, trustee, agent or representative in any capacity to any employee benefit plan as defined by ERISA.

Additionally, the court has appointed an independent fiduciary, AMI Benefit Plan Administrators Inc., to terminate the plan, collect and administer the plan’s assets (including the restitution from the criminal case) and make distributions to the affected participants.

The full consent order is available here. 

Products June 21, 2017

Redhawk Brings ERISA Fiduciary Services to IRA Space

The FiduciaryShield toolset launched by Redhawk aims to help advisers meet fiduciary responsibilities on behalf of IRA holders.
Reported by

As the Department of Labor’s (DOL) fiduciary rule undergoes its first days of implementation, virtually every stakeholder providing retirement investment advice has become an Employee Retirement Income Security Act (ERISA) fiduciary. 

To help advisers adapt to this evolving regulatory environment, Redhawk Wealth Advisors has launched FiduciaryShield, a set of tools designed to help advisers meet their fiduciary responsibilities on behalf of individual retirement account (IRA) holders. Redhawk says the package’s development was influenced by the firm’s experience as an ERISA 3(38) fiduciary investment manager servicing qualified retirement plans throughout the United Sates.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“It was a natural for Redhawk to port over the comprehensive fiduciary process we developed for ERISA plans to the wealth management space,” says Redhawk CEO Dan Hunt. “We’ve been serving as an ERISA investment fiduciary for so many years and now advisers can leverage this proven process for their individual IRA clients.”

Marcia Wagner of The Wagner Law Group adds, “As a result of the application of the DOL fiduciary rule, virtually all firms and their advisers will be deemed to be fiduciary investment advisers when advising retirement clients. The use of Redhawk’s fiduciary process may enable investment adviser representatives and registered representatives to provide investment advice to IRA owners without exposing themselves to fiduciary risk.”

Redhawk’s FiduciaryShield is among the wave of fiduciary-focused products which has poured into the industry in response to the DOL’s fiduciary rule. Other providers with recent product launches include Principal Financial Group, Nationwide and PCS.

«