Compliance August 16, 2016

Pension Plans to Receive Settlement in Caremark Fraud Case

The plaintiffs serving as representatives of the class include the City of Birmingham Retirement and Relief System.
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An Alabama Circuit Court Judge granted final approval to a $310 million class action settlement that seeks to rectify a fraud committed against more than 20,000 individuals, entities and pension plans who owned stock in MedPartners, Inc., in the late 1990s.

MedPartners changed its name in 2000 to Caremark Rx and merged with CVS Health in 2007. The lawsuit claims that Birmingham-based MedPartners, Inc., a physician practice management company, lied to its shareholders about how much the company could pay to settle securities-fraud lawsuits in 1999.

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The class is made up of investors who purchased MedPartners securities from 1996-1998. The plaintiffs serving as representatives of the class include the City of Birmingham Retirement and Relief System.

According to a news release from the law firm Hare, Wynn, Newell & Newton, more than 20 securities-fraud lawsuits were filed by investors in 1998 against MedPartners. Those lawsuits alleged that MedPartners made false and misleading statements to the public about its financial condition and prospects. The lawsuits were combined and settled in 1999 for $56 million after MedPartners and its insurer, AIG, claimed MedPartners was teetering on the edge of bankruptcy and that $56 million exhausted the limits of its insurance coverage.

In 2003, a new class action lawsuit was filed against MedPartners (Caremark) and AIG for not disclosing the true fact that in 1999, AIG provided unlimited insurance coverage to MedPartners for the 1998 securities-fraud lawsuits. This claim alleged that Caremark and AIG committed fraud in the 1999 settlement.

In 2011, CVS Caremark Corp. agreed to pay nearly $20 million to settle three lawsuits involving allegations that the company defrauded pension systems in three states. Those lawsuits contained different allegations against the company than the Alabama case.
Products August 16, 2016

Capital One Adds 401(k) Platform to Small Business Solutions

Spark 401k is designed for businesses with fewer than 100 employees to deliver a retirement planning experience that offers the benefits available to larger companies.
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Capital One launched Spark 401k, providing low-cost, all-exchange traded fund (ETF) 401(k) plans to small business owners and employees.

Spark 401k is designed for businesses with fewer than 100 employees to deliver a retirement planning experience that offers the benefits available to larger companies. These benefits include the ability to build a retirement nest egg with tax-deferred dollars, reduce business taxes, and recruit and incentivize employees.

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Spark 401k leverages the technology and expertise behind Capital One’s ShareBuilder 401k. Spark 401k also provides access to low-cost ETFs that keep investment expenses less than 1%, helping employees further grow their nest egg.

“Today, only 13% of small businesses offer a retirement plan and while many say they want to provide a plan, they often put it off because they think it will be too expensive, burdensome or complicated,” says Stuart Robertson, president of Capital One Advisors 401k Services, which oversees ShareBuilder 401k and Spark 401k. “We designed Spark 401k to make retirement planning easier and more accessible for small businesses. With its online plan management and direct access to licensed 401(k) advisers and customer success managers, Spark 401k can help small business owners plan for the future—for themselves and their employees—while they pursue their primary passion, running their business.”

With small businesses increasingly relying on mobile technology, Spark 401k provides owners a streamlined, digital experience to easily determine which plan best suits their needs. Spark 401k provides three types of 401(k) plans and oversees each plan’s investment fiduciary responsibilities for no additional cost.

More information is at www.spark401k.com.

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