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Compliance October 11, 2019
Court Orders ESOP Fiduciary to Complete Fiduciary Training
This is in addition to $454,545 in restitution to the plan, paid by the company and its employee stock ownership plan fiduciaries, for causing the plan to pay more than fair value for stock purchases.
Reported by PLANSPONSOR Staff
The U.S. District Court for the Eastern District of Tennessee has approved a settlement between the U.S. Department of Labor (DOL) and Big G Express Inc., Stephen Thompson, and David Nolan involving the company’s employee stock ownership plan (ESOP).
In accordance with the consent judgment, Big G Express—a Shelbyville, Tennessee-based trucking company—paid $454,545 in restitution to the plan. The Department also assessed a civil penalty of $45,454 against the defendants.
In addition to the reimbursement to the ESOP, the court ordered Thompson, the ESOP’s former trustee, to be enjoined permanently and restrained from serving as a fiduciary, trustee or service provider to any Employee Retirement Income Security Act (ERISA) plan. The court also ordered Nolan, Big G Express’s chief financial officer, to complete 12 hours of fiduciary training within 12 months of his appointment as a fiduciary or service provider to any employee benefit plan.
The court’s action follows an investigation by the DOL’s Employee Benefits Security Administration (EBSA) which found that in October 2009, both Thompson and Nolan—acting as fiduciaries for the ESOP—caused the plan to pay more than fair market value when it purchased Big G Express common stock from Nolan and other shareholders.
The judgment also orders that Big G Express Inc., Thompson, and Nolan not seek direct or indirect contribution or indemnification from the ESOP either to pay the judgment or to pay its legal expenses.