The U.S. Department of Labor has filed suit against San Francisco’s Pacific Bank, alleging the bank, its CEO and three additional fiduciaries of its Employee Stock Ownership Plan mismanaged plan assets potentially resulting in $1.4 million in plan losses.

The government alleges that when the Pacific Bank fiduciaries terminated the ESOP in 2010, they failed to distribute plan assets in cash as required under the Employee Retirement Income Security Act. Instead, the ESOP participants were stuck with company stock, which the complaint alleges was difficult — if not impossible — to liquidate for cash.

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