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Compliance July 26, 2012
Former CEO Subject of ESOP Suit
July 26,
2012 (PLANSPONSOR.com) - The Department of Labor (DOL) is suing the former CEO of
a New Jersey paving company, saying he sold stock to his company’s Employee
Stock Ownership Plan (ESOP) for more than it was worth, according to multiple
reports.
Reported by Jay Polansky
Vincent DiPano, former CEO of the SJP Group and trustee to its ESOP, allegedly netted $16 million from the sale. The DOL also charged First Bankers Trust Services of Philadelphia, the independent trustee to SJP’s employee stock ownership plan, with failing to meet its fiduciary duty to beneficiaries by approving the sale without ensuring it was accurately valued.
The agency is seeking to force both defendants to restore the money plan participants lost when they bought DiPano’s shares, and for DiPano to disgorge any profits he made from the sale. It is also seeking to bar both from serving as a fiduciary or service provider to an Employee Retirement Income Security Act (ERISA) retirement plan.
The plan had 188 retirement plan participants in 2010, according to reports.