Compliance April 11, 2011

Appellate Court Sends Back Kraft Fee Case

A federal appellate court has thrown out a lower court’s decision in favor of an excessive retirement plan fee lawsuit and sent the matter back for further proceedings.
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Ruling in Gerald George  vs. Kraft Foods Global,  the 7th U.S. Circuit Court of Appeals contended there were still too many potential disagreements between the two sides, concluding that U.S. Magistrate Sidney I. Schenkier for the U.S. District Court for the Northern District of Illinois was wrong when he ruled for Kraft in the fiduciary breach case.

“In sum, because we find that the record reveals a genuine issue of material fact as to whether defendants breached the prudent man standard of care by failing to make a reasoned decision under circumstances in which a prudent fiduciary would have done so, we reverse the district court’s grant of summary judgment on this issue and remand for further consideration,” wrote U.S. District Lynn S. Adelman, of  the U.S. District Court for the  Eastern District of Wisconsin.

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In the original suit, the plaintiffs argued that the recordkeeping fees and an employer’s decision to unitize its company stock fund were a fiduciary breach under the Employee Retirement Income Security Act (ERISA) (see “Case Sensitive: Reasonable Redoubt“).

Deals & People April 11, 2011

GEAM Appoints SVP, Institutional Sales

GE Asset Management (GEAM) selected Doug Heckman to be Senior Vice President of Institutional Sales.
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Heckman will report to Steve Johnson, Senior Vice President and Head of Sales – U.S. and Asia. He will be tasked with bringing GEAM’s investment capabilities to institutional investors in the southeastern U.S.

Heckman has more than ten years’ experience in the institutional investment management industry. Prior to joining GEAM, he was a Managing Director at Phoenix Investment Partners (now Virtus Investment Partners), where he was responsible for new business development, client service and consultant relations. He has also held sales roles as a Senior Vice President at WestAM, covering the eastern U.S., and as a Vice President at Neuberger Berman, covering the southeast.

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He earned a B.S. in Engineering from the U.S. Military Academy at West Point and an MBA in Finance from Duke University.

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