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News Release
Retirement Funds Restored to South Bay Workers Labor Department Settles with Sunnyvale Electronics Manufacturer
Archived News Release — Caution: Information may be out of date.
San Francisco, California - A South Bay business owner and his Sunnyvale company have agreed to restore $75,000 to the company’s profit sharing plan. Under the terms of a consent decree, entered by the U.S. District Court in San Jose April 15, William Michael Weist and Abacus Electronics Company, Inc. will repay $75,000 to the profit sharing plan.
The consent decree settles allegations by the Labor Department that Weist breached his fiduciary responsibilities by imprudently investing the plan’s assets and failing to make an employer contribution to the plan in a timely manner. The Labor Department alleged that Weist invested up to 93% of the plan’s assets in extremely high-risk stocks of single technology companies on several occasions over a five-year period, which resulted in significant losses to the plan.
Approximately 25 current and former employees of Abacus, which produces electronic components, participate in the company’s plan. The judgment specifies that the funds Weist and Abacus repay must be distributed to the other plan members, and they must not benefit Weist.
“The Department of Labor has zero tolerance for plan fiduciaries who take extreme risks with employees’ retirement funds by imprudently investing them in speculative tech stocks,” said Bette Briggs, regional director for the Pension and Welfare Benefit Administration in San Francisco, which investigated the case.
As part of the agreement, Weist will be permanently barred from exercising discretionary investment authority for any employee benefit plan covered by the Employee Retirement Income Security Act.
(Chao v. Abacus Electronics Co., et al
Civil Action No. 02-01293 JF)
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Archived News Release — Caution: Information may be out of date.