CS Capital Management and Paul H. Saylor, company president, chairman and CEO, agreed to pay about $1 million to the $4.6 billion Plumbers and Pipefitters National Pension Plan, Alexandria, Va., in a settlement of a Department of Labor complaint alleging that the company had imprudently invested plan assets, the DOL announced in a news release Monday.
Under the settlement, CS Capital also agreed to pay $110,000 in fines to the federal government, the DOL news release said.
The DOL complaint, filed in U.S. District Court in Alexandria, Va., alleged that CS Capital and Mr. Saylor violated ERISA by investing $25 million of the multiemployer pension fund’s assets in bonds for the Playa Vista development project in Los Angeles in 1998, an investment that went sour.
“These defendants violated their duty to responsibly manage the plan’s investments,” Labor Secretary Hilda Solis said in the news release.
In a telephone interview, Mr. Saylor said the company had only settled with the DOL to make the issue go away.
“It (DOL’s allegation of wrongdoing by the company) was without basis or rationale,” Mr. Saylor said. “It was either pay them or this wasn’t going away.”
“There’s no admission of guilt or liability,” Mr. Saylor added. “It’s just highly embarrassing, not to mention infuriating.”
William T. Sweeney Jr., the multiemployer plan’s administrator, declined to comment.