Strong Capital Management announced today the settlement of a Department of Labor inquiry into 1,598 cross trades involving pension clients that were made by the firm's predecessor, Strong/Cornelieuson, between 1987 and 1989.
The Department of Labor filed a complaint alleging that the cross trades were made without the direction of the employee benefit plans involved and without adequate representation to the plan sponsors; such cross trades violate ERISA, the department said.
Strong agreed to reimburse certain existing and former pension clients a total of $5.9 million. Strong did not identify the clients. The settlement means Strong neither admitted nor denied the allegations. The company said it would not engage in further cross-trading.
