Compliance April 9, 2015

Real Estate Services Firm Settles Stock Drop Case

LandAmerica Financial Group will pay $5 million to settle claims it held company stock in its 401(k) plan when it was imprudent to do so.
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A class of former LandAmerica Financial Group employees agreed to a $5 million settlement of stock-drop claims arising from LandAmerica’s 2008 bankruptcy.

According to the Proskauer law firm, LandAmerica filed for bankruptcy following the 2008 collapse of its title insurance subsidiary. The complaint alleged that certain LandAmerica directors and officers breached their Employee Retirement Income Security Act (ERISA) fiduciary duties by, among other things, (1) imprudently investing in LandAmerica stock even though they knew that its title insurance subsidiary was backed by inherently risky subprime mortgage loans, and (2) concealing the truth about the firm’s deteriorating condition.

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During the class period of the lawsuit, the value of LandAmerica stock in the company’s 401(k) plan fell, from just more than $28 million, to $76,552.

The Pension Benefit Guaranty Corporation (PBGC) previously took over the defined benefit pension plan from the real estate services firm based in Glen Allen, Virginia, following its bankruptcy.

The settlement agreement has been submitted for court approval. The case is Borboa v. Chandler, E.D. Va Case No. 13-cv-00844.

Products April 9, 2015

GRP Offers Accommodation B/D Services

To ensure regulations compliance and proper treatment of broker/dealer income, Global Retirement Partners (GRP) will offer access to accommodation broker/dealer services.
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The services help advisers and group benefits firms address issues such as properly handling broker/dealer commission revenue received by a retirement plan adviser.

“A broker/dealer, for the most part, can only pay a registered representative or another broker/dealer,” explains Jim Williams, president of GRP. “Frequently an adviser will remit their broker/dealer commissions received to their employers, who will then pay them a salary or bonus.”

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Using its access to an accommodation broker/dealer facility, GRP helps remediate these issues and ensures compliance and effective business operations, freeing clients to spend more time on creative plan sponsor and participant solutions.

Global Retirement Partners, a retirement plan consulting firm with a national footprint, assists retirement plan advisers in business expansion through financial wellness programs, wealth management capabilities and executive benefits, among other offerings.

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