Among recent enforcement actions by the Securities and Exchange Commission, a man targeting Chinese investors seeking U.S. residency had his assets frozen and a former investment bank analyst and two others were charged with insider trading.
Also, the Department of Labor obtained a consent judgment that awards damages to three whistleblowers who experienced retaliation after they spoke up about violations of the Employee Retirement Income Security Act (ERISA).
ERISA Whistleblowers Win Settlement
The U.S. District Court for the Central District of California has ordered 12 trustees of the Los Angeles-based Cement Masons Southern California Trust Funds and its service provider, Zenith American Solutions, to pay $630,000 in lost wages and damages to Cheryle Robbins, Cory Rice and Louise Bansmer. The decision comes in a consent judgement obtained by the U.S. Department of Labor.
Robbins, who was director of the CMSCTF audit and collections department, believed that Scott Brain, a CMSCTF trustee and business manager for Cement Masons Local Union 600, was violating the federal Employee Retirement Income Security Act. She spoke up internally, and in 2011, cooperated with a federal criminal investigation into Brain's activities. Rice and Bansmer supported her efforts.
When it learned of her cooperation, the joint board of trustees voted to place Robbins on administrative leave. CMSCTF subsequently outsourced her department to Zenith American Solutions, and Robbins was the only employee not hired by Zenith.
An investigation by the DOL's Employee Benefits Security Administration found that the trustees of the CMSCTF, the trust funds' counsel Melissa W. Cook, law firm Melissa W. Cook & Associates, Zenith American Solutions, and its account executive Bill Lee had retaliated against Robbins unlawfully. As a result, DOL filed suit on May 21, 2014.
The lawsuit was later amended to allege that Rice and Bansmer were later fired, because of their participation in Robbins' internal whistleblowing activities or because they refused to cease communicating with her after she was placed on leave.
In addition to the $630,000 paid to the three whistleblowers in lost wages and damages, the order requires the settling trustee defendants to approve pension service credits to Robbins, who previously recovered $200,000 in a private state court action based on her wrongful termination.
The order also asks the settling trustee defendants to call for Scott Brain to resign from any trustee position he currently holds, and to support the adoption of an investigation procedure to address future complaints about trustees. Also, both the settling trustees and Zenith American Solutions, including Lee, are permanently enjoined from retaliating against whistleblowers and the settling trustees and Zenith American Solutions' employees, including Lee, are required to receive training under ERISA.
The lawsuit continues with respect to four defendants: Brain, Cook, Melissa W. Cook & Associates, and one Local 600 trustee.
Real Estate Investors Misused Chinese Immigrants' Money, SEC Says
The SEC has announced an asset freeze against Lobsang Dargey of Bellevue, Washington, who is accused of defrauding Chinese investors seeking U.S. residency through the EB-5 Immigrant Investor Pilot Program by investing in his companies.
