US Labor Department sues Rochester, New York, investment advisor and plan administrator to recover losses suffered as result of fiduciary breaches

Date of Action: Dec. 29, 2014

Type of Action: Complaint

Names of Defendant: Roger Ramsay and Compensation Planning Corp. of Rochester Inc.

Allegations: Defendant Roger Ramsay provided investment advisory services as a fiduciary to any least nine employee benefit plans covered under the Employee Retirement Income Security Act. He provided the services through SAR Services, Inc., a company he owned and operated. He was also the sole owner and president of Compensation Planning Corp. of Rochester Inc., a third party administrator to the plans.

An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration found that from at least 2006 through 2011, Ramsay caused himself, CPC or SAR to be paid certain commissions and fees, the amounts of which were not properly disclosed to or specifically authorized by the plans or independent fiduciaries. Ramsay also failed to use all fees received by him to offset fees that the plans otherwise would have had to pay and used his fiduciary authority as investment adviser to cause the plans to remain invested in a higher fee fund class when the same fund portfolio was available in a lower fee class. By these actions, Ramsay breached his fiduciary responsibilities under ERISA and caused the plans to suffer financial losses for which he was liable.

Resolution: The Department is asking the court to: require the defendants to correct the prohibited transactions; restore to the plans all losses, plus interest; disgorge any and all plan assets obtained; disgorge any and all enrichment resulting from the breaches; permanently enjoin the defendants from future ERISA violations; and permanently prohibit the defendants from serving as fiduciaries or service providers to any ERISA-covered employee pension or benefit plan.

Court: U.S. District Court for the Western District of New York

Docket Number: 14-CV-01088