Officials of DirecTECH Holding Co. Inc.’s employee stock ownership plan will have to pay $10.45 million in restitution to 5,799 plan participants and more than $1 million in federal penalties under a consent decree announced Wednesday by the Labor Department, which sued the trustees, members of the board of directors and other parties involved in questionable stock purchases by the plan.
According to a DOL news release, some trustees and board members of pensions plans maintained by the Maysville, Ky.-based firm and former subsidiaries in Michigan and Louisiana, along with other defendants, used plan assets to purchase company stock at inflated prices, with flawed valuations and inaccurate appraisals, “causing millions of dollars of losses to the plans and their participants, while enriching the defendants.”
The defendants also were barred from most ERISA fiduciary duties for 10 years and permanently for plans with employer securities.
Efforts to reach plan officials were unsuccessful.
