The Department of Labor (DOL) recently brought two actions related to breach of fiduciary duty.
The first was an action against the co-founder and director of a now-defunct investment management company has resulted in a default judgment and order for restitution, as well as other penalties.
Steven Salutric, cofounder and director of Elmhurst, Illinois-based Results One Financial LLC, was ordered to restore $1,211,902.25 to four pension plan client accounts from which he allegedly withdrew funds from 2005 through 2009 in violation of the Employee Retirement Income Security Act.
Results One Financial was a registered investment advisory company that provided services to a broad range of clients that included ERISA-covered employee benefit plans. Salutric was accused of misdirecting the assets of client plans to entities in which he had an interest. Those entities included a film distribution company, a restaurant and a real estate partnership, as well as a church where he served as treasurer.
"It is particularly egregious when those entrusted with protecting workers' retirement assets jeopardize them by committing illegal acts for personal gain," said Labor Secretary Hilda L. Solis in a statement.
In this case, an investigation by Labor's Employee Benefits Security Administration, in coordination with the Chicago Regional Office of the U.S. Securities and Exchange Commission, resulted in a lawsuit filed in federal district court in Chicago.
The resulting court order requires Salutric to restore all losses, including lost opportunity costs, to the four pension plan clients and to correct the prohibited transactions involved. The judgment also bars Salutric from serving as a fiduciary or service provider to any employee benefit plan governed by ERISA in the future.
