Compliance March 26, 2009

Michael Vick and Financial Advisers Sued for ERISA Violations

The U.S. Department of Labor (DoL) is suing former National Football League (NFL) player Michael Vick and his former financial advisers alleging violations of federal employee benefits law.
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The DoL’s lawsuit, filed in federal district court, alleges that Vick and others violated federal employee benefits law by making a series of prohibited transfers from a pension plan sponsored by MV7, a celebrity marketing enterprise owned by Vick.

Former Vick financial advisers Mary Wong and David Talbot were also named in the complaint for allegedly participating in some of the transfers. In addition, MV7 is charged with having a co-fiduciary liability for the actions of Vick and Talbot.

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In a news release, the DoL said it also simultaneously filed an adversary complaint in federal bankruptcy court to prevent Vick from discharging his alleged debt to the MV7 retirement plan. The company sponsored a defined benefit retirement plan for nine current and former employees as of October 2008.

The DoL alleges that Vick violated his duties as a plan trustee under the Employee Retirement Income Security Act (ERISA) by making a series of prohibited transfers from the plan for his own benefit. The plan assets were partially used to help pay the criminal restitution imposed upon Vick after his conviction for unlawful dog fighting as well as his attorney in the bankruptcy cases (Vick filed for Chapter 11 bankruptcy on July 7, 2008).

From March 7, 2007, through July 7, 2008, Vick made and caused $1.35 million in withdrawals from the retirement plan, DoL alleges.

Data & Research March 26, 2009

Americans Plan to Save Tax Refund

Almost three-fourths of polled Americans won’t be spending their tax refund for 2008.
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An ING DIRECT news release said 71% of respondents plan to save the money, invest it, or apply it to their debt.

According to ING, 51% of respondents expecting a refund for 2008 will use it to cover basic household expenses, including 65% who are under the age of 35. One in four Americans expecting a federal tax refund plan to save their refund and one in three (39%) will pay off debt with their refund this year.

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For Americans who owe taxes this year, 43% stated that they will dip into savings to pay Uncle Sam.

The national online survey was conducted by Harris Interactive on behalf of ING DIRECT between March 17 to 19, among 2,115 adults age 18 or older.

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