Judge Clears Path for Fund Trading Suit against
Strong
December 9, 2005 (PLANSPONSOR.com) - A federal judge
in Maryland has allowed a K plan participant to push forward
with his allegations of an Employee Retirement Income
Security Act (ERISA) fiduciary violation against a provider
in connection with market timing and late trading.
US District Judge Catherine Blake of the US
District Court for the District of Maryland issued the
ruling as part of a multi-district litigation case that
also includes similar charges against seven other fund
providers.
In addition to the portion of the case against Strong
Capital Management involved in Blake’s most recent
ruling, similar suits are pending against
Alliance
, Amvescap, Bank of America, Bank One, Janus and Marsh
& McLennan/Putnam. The multi-district case was filed by
New York state Attorney General Eliot Spitzer, who has
spearheaded a state/federal fund industry investigation in
recent years that has focused on market timing, late
trading and certain sales practices.
The court rejected the argument that as a former
participant who had already received his lump-sum
distribution from his K plan, Flynn lacked standing to
pursue a fiduciary breach claim under ERISA.
Asserted Blake: former participants “should not
forfeit a cause of action under ERISA to recover what is
rightfully theirs under the plan by taking a pay-out of
what they incorrectly believe is all that is owed to them
at that time.” Flynn charged that the Strong mutual
funds improperly permitted illegal late trading and/or
market timing and that the value of participants’
investments was diluted as a result.
The court also threw out Strong Capital’s argument
that Flynn’s lawsuit should be dismissed because, as an
eligible individual account plan, the K plan’s
investment in Strong Capital’s mutual funds was
entitled to a presumption of prudence under which the
decision to invest in the funds should be deemed prudent
unless Strong Capital faced “impending
collapse.”
According to Blake’s ruling, Flynn started working
at Strong Capital in September 2001 and was later was
transferred to Strong Financial Corp., where he
participated in a K plan that consisted of 28 investment
alternatives from the Strong family of mutual funds.
According to the court, Strong Capital was the investment
adviser for the mutual funds.
Flynn left his employment at Strong Financial in 2003
and received a lump-sum distribution from his 401(k)
account.
The opinion in In re Mutual Funds Investment Litigation,
D. Md., No. 1:04:md-15864-CCB, 12/6/05 is
here
.
December 8, 2005 (PLANSPONSOR.com) - As the holidays
approach, many of us will be exchanging gifts with friends
and co-workers. This week, we asked readers if they would be
giving their BOSS a gift.
Believe it or not, nearly half (
44.29%
) said they were – though the motivations for doing so were
mixed… and generally, it was a “group” endeavor.
“Yes, all of the managers and supervisors who report to
my boss chip in and get him a gift,” noted one.
“Saves the time and trouble of trying to get an individual
gift.”
Another said,
“It will be a group effort/presentation.
As with any team, we will all either come up smelling like
roses, or go down together!”“A) Yes…. And I hate it!”
said another.
“My boss always gets me a present, which is very nice,
but I feel compelled to return the nicety, which just adds
to the stress of holiday shopping and not knowing what to
get people!”
Another said succinctly,
“Yes.
Don’t dare not to.”
“I have the rare good fortune of having a great job
with a great boss in a fabulous office environment.
He deserves a little reward for bringing me in, well,
besides his good fortune to have me working for him!”
noted another.
“Yes, but it’s because she’s one of my best
friends, not because she’s my boss,”
said another.
The next most common response (
23%
) was “other” – and while there was variety here, mostly it
fell into one of two camps: the adoption of some kind of
gift exchange within the department (that included the boss
as a participant, and exchanges that allowed for the
“theft” of gifts as part of the distribution were popular),
or the decision to devote those resources to helping others
in need.
“The management team of our office has indicated that,
rather than have everyone go in on getting them gifts as we
had in years past, we put the money towards the family that
we adopted,”
noted one, who went on to say what a great idea it was to
“shop for a family who needs everyday stuff instead of
finding something for someone who can buy pretty much
anything then want.”
Another noted,
“Last year some of us informally decided NOT to
exchange gifts and instead donate the amount we normally
would spend on office gifts to a local charity.
Our department was already collecting donations at our
holiday lunch, so this made the donation to the charity
much larger.
It worked out great for everyone — no more searching for
affordable (i.e., cheap) gifts for people who don’t
really need little token gifts, and the charity received a
much larger donation.
The bosses loved it, too!”
Other was also a category for some other responses,
including the reader who noted,
“The question assumes everyone has only ONE BOSS, while
in this complicated day and age in which we live, that,
unfortunately, isn’t the case for 100% of us. Having
more than one (three actually, in a complex,
matrix-reporting structure which still defies any
explanation!!!) boss is complicated enough, given that they
are in different locations, and all of which are constantly
battling for a greater % of my time!! So, sorry, no gifts
for them!! (I don’t think they’d be happy with a
third of a gift each, anyway!!!!!!!!!!!)”
Echoing those concerns was the reader who said,
“Yes – although your question has me thinking about the
arrangement.
I am an administrative assistant and therefore the only
employee of two bosses.
Last year I gave them both gifts, but they went together
and I only received one.
Maybe I should make them share this year….”
Another
22%
of the vote was split almost evenly between two other
categories – no, other than the privilege of working for
him/her; and no, and if you knew him/her you’d
understand.
“His gift is that I am still here, despite him,”
explained one, while another said,
“S/he has no idea how lucky they are I’m still
here. They are living on borrowed time.”
Or, as one reader noted,
“d) No, other than the privilege of having me working
for her because (e) if you knew my boss, you’d
understand.
Sadly, (g) my co-workers and I are concerned that a gift
would be interpreted as positive reinforcement of her
management style.”
The remaining
11%
were split between a simple “No, we don’t exchange gifts,”
“No, wouldn’t want to be seen as currying favor,” and
“Maybe – depending on if they’re naughty/nice.”
In the latter category was a reader who said,
“He is a great guy.
I’d buy him a BMW if he didn’t already have one.
He is both naughty and nice….a genuine problem for H/R.
Maybe I could take him out for a beer and we could both be
real people for a few hours.”
There were also comments that, while not really
“reflective” of any particular response category,
nonetheless provided some levity:
“Having recently applied for the job my new boss now
has, it’s sufficient to give the new boss my full
support.
:-)”
“I will be giving some small gift to my
co-workers…something like a gift set of coffees, teas,
and hot chocolate.
The boss, however, will get a lump of coal.”
“Now that you mention it, no, we don’t give the
boss a gift. Interestingly enough, however, we do give
the boss’s boss a gift, and our boss takes us out for
lunch and a movie.”
“We have a new Corporate Code of Conduct that
prohibits such gifts. Whew!”
“Yes, everyone in our department is contributing
whatever they want to the purchase of a 6-foot tiki for
our boss’s back yard.
We will be forever beholden to our co-worker who came up
with the idea for probably one of the most unusual gifts
he’ll ever receive.
We can hardly wait to see the look on his face when he
walks into his office and sees it!”
“I came to my new company this past July and made the
inquiry regarding Christmas gifts. It seems I have
entered into a group where everyone buys gifts for
everyone. Not a big deal except my wife met my assistant
this past weekend at our holiday party. I had suggested
buying this person a sweater because she always seemed to
be cold in the office. Once my wife met this person, I
got in trouble for not informing my wife that the
assistant is “so hot” (wife’s words), and
now we are looking for other gift ideas that aren’t
‘so personal’!”
And – from a totally different reader – the
acknowledgement that,
“I will also be giving many gifts along with a card and
flowers to my BOSS (i.e., wife).”
But this week’s
Editor’s Choice
goes to the reader who replied,
“I haven’t yet bought any gifts, but I have
scheduled him in for three strategy sessions with three
different ghosts.”
Thanks to
everyone who participated in our survey!