Compliance September 14, 2010

Guidant Stock Drop Settlement Gets Final OK

A federal judge in Indiana has given final approval to a $7-million settlement of a stock drop class action case against Guidant Corp.
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The deal okayed by U.S. District Judge Larry J. McKinney of the U.S. District Court for the Southern District of Indiana includes $4 million to be paid out to the at least 13,000 current or former Guidant employees who invested retirement plan dollars in company stock and $3 million for attorney fees and court costs. The period covered by the case is January 1, 2003, through November 3, 2005.

The deal was hammered out in a consolidated case involving once separate claims by plaintiffs Michael Fontenot and Erica Harzewski, that the company continued to offer company stock in its retirement plans after it was no longer prudent to do so.  The suits charged that the company had hidden information about defects in the company’s implantable defibrillators, which accounted for nearly half of the company’s revenues, and that Guidant’s share price was inflated because of the concealment.

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The Guidant case was the subject of a federal appellate court ruling in June 2007 asserting that participants can still assert claims under the Employee Retirement Income Security Act (ERISA) even after they have left their employer and taken a full plan distribution (see Cashed-Out Participants Still Have ERISA Legal Standing).

The case is In re Guidant Corp. ERISA Litigation, S.D. Ind., No. 1:05-cv-1009-LJM-TAB.

 

Deals & People September 13, 2010

Benefit Consultants Extends RK Reach

Warren, Averett, Kimbrough & Marino, LLC, which describes itself as Alabama's largest certified public accounting and business consulting firm, has expanded its recordkeeping services reach.

 

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According to a press release, the firm, through its employee benefits division, Benefit Consultants, LLC, has entered into a long-term recordkeeping and third-party administration service engagement with Dallas-based financial services firm, ISC Group, Inc.

Benefit Consultants will assume all record keeping services for ISC beginning October 1, 2010, and seven professionals formerly with ISC have joined the Benefit Consultants’ newly formed Dallas office, including Tarynn Ecton, who will serve as the Dallas Office Operations Manager for Benefit Consultants. William (Bill) C.Presson, QPA, QKA, serves as Vice President of Warren Averett’s Benefit Consultants division and Amye Rockett, QKA, will serve as the Birmingham Office Operations Manager. Presson and Rockett are based in Birmingham.

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“We are excited to expand our geographic reach into the southwestern United States and look forward to serving the plan administration needs of a significant organization like ISC Group” said Bill Presson, Vice President of Benefit Consultants. “In partnering with Benefit Consultants, ISC is able to enhance our web-based capabilities and improve efficiencies, which is a win-win for our clients and our company. We can now focus on what we do best – deliver professional money management and exceptional service to our clients,” said Scott Hayes, Executive Vice President of ISC Group.

ISC worked through Sarah Simoneaux, CPC of Simoneaux & Stroud Consulting Services to issue the request for proposal and manage their national search for a service provider, according to the announcement.

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