The U.S. Department of Labor is suing GreatBanc Trust Co. and Sierra Aluminum Co. in California for alleged violations of the Employee Retirement Income Security Act.
The DOL alleges that GreatBanc breached its fiduciary duty to the Sierra Aluminum Employee Stock Ownership Plan when it allowed the plan to pay more than fair market value for employer stock in June 2006. Sierra Aluminum, the ESOP's sponsor, also is listed as a defendant in the suit for entering into an indemnification agreement with GreatBanc that violates ERISA.
"Plan fiduciaries have an obligation to work solely in the interest of plan participants," said Assistant Secretary of Labor for Employee Benefits Security Phyllis Borzi. "When they fail to do so, the retirement security of workers is put in jeopardy, and we will take action to make plan participants whole."
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