August 30, 2016

A New York-based investment management company and its sole executive officer failed to convince an appeals court to set aside a $15 million judgment for mismanaging assets of Severstal Wheeling Inc.'s 401(k) plans (Severstal Wheeling, Inc. v. WPN Corp., 2016 BL 281947, 2d Cir., No. 15-2725, unpublished 8/30/16).

The U.S. Court of Appeals for the Second Circuit affirmed Aug. 30 a district court decision that held liable WPN Corp. and and its executive officer, Ronald LaBow, for breaching their fiduciary duties under the Employee Retirement Income Security Act. The district court's finding of liability wasn't based solely on the transfer of plan assets, but in the fact that LaBow exclusively selected for the transfer assets previously managed by Neuberger Berman LLC, didn't give notice of the transfer and failed to ensure the prudent management of those assets, the appeals court said.

The full article can be read here.