Compliance March 4, 2010

DoL Sues ESOP Trustee over Stock Purchase

The U.S. Department of Labor has sued a trustee of the Westra Construction Inc. Employee Stock Ownership Plan (ESOP) for alleged violations of the Employee Retirement Income Security Act (ERISA) that resulted in losses to the ESOP.
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A DoL news release said the lawsuit alleges that trustee Steven D. Westra caused the ESOP to purchase 40,000 shares of non-voting convertible preferred company stock for $4 million on the basis of valuation reports and fairness opinions he knew or should have known were flawed.  The stock was purchased with assets transferred from another retirement plan sponsored by the company.

On July 9, 2005, the company ceased operations and preferred stock purchased by the ESOP 21 months earlier became worthless, according to the news release.

“This defendant diverted retirement assets to subsidize corporate activities, thereby jeopardizing the future retirement income of their workers,” said Phyllis C. Borzi, assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA), in the release.

The DoL has asked the court to order the trustees of the plan to restore all losses owed to the ESOP as a result of Westra’s fiduciary breaches and to correct any transactions prohibited by law.  The department also seeks to bar the defendants from serving as fiduciaries to any ERISA-covered employee benefit plan.

Diversions March 4, 2010

Are You a Dog Person or Cat Person?

There might really be a difference between “dog people” and “cat people,” new research suggests.
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Research by a psychologist at the University of Texas at Austin found that those who define themselves as “dog people” are more extroverted, agreeable, and conscientious than self-described “cat people.” On the other hand “cat people” tend to be more open and neurotic.

“This research suggests there are significant differences on major personality traits between dog people and cat people,” said Sam Gosling, who conducted the study with graduate student Carson Sandy, in a release of the study. “Given the tight psychological connections between people and their pets, it is likely that the differences between dogs and cats may be suited to different human personalities.”

As part of the research, 4,565 volunteers were asked whether they were dog people, cat people, neither, or both. The same group was given a 44-item assessment that measured them on the so-called Big Five personality dimensions psychologists often use to study personalities.

The study found that 46% of respondents described themselves as dog people, while 12% said they were cat people. Almost 28% said they were both and 15% said they were neither.

Dog people were about 15% more extroverted, 13% more agreeable, 11% more conscientious than cat people. Cat people were generally about 12% more neurotic and 11% more open than dog people.

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