Merrill Lynch, Pierce, Fenner & Smith Inc. has settled allegations by the U.S. Department of Labor that the company and one of its employees violated the Employee Retirement Income Security Act by failing to prevent the fiduciaries of two Alabama pension plans from engaging in prohibited transactions.
As part of the settlement, Merrill Lynch must restore $170,854 to the plans of Amtren Corp. and Otorhinolaryngology Associates PC and provide additional training to its investment advisors serving as employee benefit plan fiduciaries.
The Department of Labor's Employee Benefits Security Administration alleged that fiduciaries of the two Alabama-based companies' profit-sharing pension plans made improper loans. Gilbert Meadows III, an investment advisor at Merrill Lynch's Montgomery branch office, provided advisory services to both plans. EBSA asserted that Meadows knew the loans were imprudent and considered prohibited transactions under ERISA but failed to take reasonable efforts to remedy these breaches of duty by his co-fiduciaries.
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