Chicago Corporation Ordered To Pay More Than $17,000 Into Trust Account For Plan Participants

Archived News Release — Caution: Information may be out of date.

Lexington Securities, Inc., of Chicago, Ill., was ordered to pay $17,597 into a trust account to reimburse participants of the corporation’s profit sharing plan, in a consent judgment and order obtained by the U.S. Department of Labor.

The judgment and order also appointed John R. O’Brien, an Illinois attorney, as custodial trustee to administer the account by distributing its funds to the eligible plan participants, and provided that Lexington Securities, Inc., pay all fees and expenses charged by O’Brien in connection with his duties as custodian of the trust account.

The actions resulted from a November 1998 lawsuit filed against Lexington Securities, Inc., by the Labor Department alleging that the corporation and its plan fiduciary, Paul Maton, withheld voluntary contributions from employees’ paychecks from May 1, 1995, through June 31, 1995, but failed to deposit them into the plan’s investment accounts. Such an action violates provisions of the Employee Retirement Income Security Act (ERISA), which prohibits either direct or indirect transactions between an employee benefit plan and any related party in which the party benefits at the expense of the plan participants.

The $17,597 payable by Lexington Securities represents $12,609 in principal and $4,988 in lost opportunity costs owed to the plan participants. It is payable no later than 90 calendar days following entry of the consent judgment and order.

The consent judgment and order resulted from an investigation by the Chicago Regional Office of the Pension and Welfare Benefits Administration into violations of ERISA. It was entered in the federal district court in Chicago, Ill., on June 8.

Herman v. Lexington Securities, Inc., et al
Civil Action No. 98-C-7180

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Archived News Release — Caution: Information may be out of date.