Los Angeles partner Bruce Ashton was quoted in an Ignites article titled, “DOL Scores Win in 'Fox Guarding Henhouse' Fee Suit.” The article discussed the recent ruling in favor of the Department of Labor against a large California bank. The DOL asserts that the bank pocketed a profit of more than $4 million for recordkeeping services and breached its fiduciary duty to participants in the defined contribution plan that its parent company sponsors.

The fact that the case wasn’t resolved at the investigation stage may indicate that City National Bank “believes it has a stronger position than the DOL thinks it has,” said Bruce. After pointing out that plan sponsors can only recoup their actual out-of-pocket expenses, he added, “Serving as an affiliated recordkeeper requires that the company keep close tabs of direct expenses.”

Source: Ignites