Compliance November 1, 2010

Plumbing Company Owner Guilty of 401(k) Plan Theft

A U.S. District Court jury found the former owner of a plumbing company in Texas guilty of embezzling from its 401(k) plan.
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U.S. Attorney James T. Jacks of the Northern District of Texas presided over the case in which Thomas Buehler, president and owner of Northlake Plumbing, Inc., was the focus of a civil investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA). A plan participant had complained that Buehler withheld employee contributions to the plan from participants’ paychecks and had not contributed the funds to the plan. Buehler was then accused of terminating the plan, which had five participants with balances.  

Instead of instructing Oppenheimer Funds to pay out the participants, Buehler told Oppenheimer to liquidate the plan’s assets and issue checks to him, as the plan trustee, according to the announcement. Oppenheimer issued and mailed Buehler five checks, totaling $55,787. A few days later, Buehler deposited all five checks into the Northlake Plumbing account.  

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A second EBSA investigation was conducted after a participant complained that Buehler had refused to distribute funds from the 401(k) even though he had terminated the plan. The court found that Buehler had unlawfully diverted approximately $52,693 of the plan’s assets to himself.   

During its earlier investigation, EBSA determined that Buehler had not remitted employee contributions into the plan in a timely manner in some instances, or not at all in others, and issued a voluntary compliance letter to Buehler directing him to deposit $15,576 into the plan to correct the violation – Buehler complied.
The Markets November 1, 2010

Janus Unveils Three New Funds

Janus Capital launched three new investment strategies, which are available for U.S. institutional investors in separate accounts.
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A news release said the offerings – Janus Emerging Markets Equity Portfolio, Janus Global High Yield Portfolio and Janus Global Investment Grade Bond Portfolio – are actively managed emerging market equity and global bond strategies.

The Janus Emerging Markets Equity Portfolio will invest in emerging markets securities and will be benchmarked to the MSCI Emerging Markets Index. The strategy, which was formally launched on September 30, 2010, is managed by co-portfolio managers Wahid Chammas and Matt Hochstetler.

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The portfolio managers will invest up to 80% in companies based in emerging markets that they believe are trading below their estimate of the stock’s long-term value. They seek quality companies with what they believe have sustainable competitive advantages and high or improving returns on capital.

“Emerging market equities are increasingly becoming an important part of the global economy,” said Jonathan Coleman, Co-CIO, Equity with Janus, in the news release “We think this strategy will be a compelling investment option for investors seeking access to emerging markets in a standalone strategy.”

Meanwhile, the Janus Global High Yield Portfolio and Janus Global Investment Grade Bond Portfolio, which were launched on October 29, 2010, are Janus’ first two global bond strategies. The portfolios, which are co-managed by portfolio managers Gibson Smith and Darrell Watters, will utilize a fundamentally driven investment process focused on credit-orientated investments around the world.

According to the news release, the benchmark for Janus Global High Yield Portfolio is the Barclays Capital Global High Yield Index, and Janus Global Investment Grade Bond Portfolio is benchmarked to the Barclays Capital Global Aggregate Corporate Bond Index.

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