Millions of Americans depend on their pension funds to support them through their retirement plans. As the trustee of a pension fund, you know you have to make important investment decisions about how the fund will maintain and invest its assets.
Unfortunately, when making those investment choices, it can be easy to be lied to, misled, or given poor investment advice about the types of investments that should be selected for your retirement years. In extreme cases, financial advisors have even stolen pension assets by convincing the trustee to invest in what turned out to be fictitious investments.
At Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorslawyers.com), we work with pension funds to help them get back the losses they sustained because they were the victims of fraud involving brokerage firm negligence or broker misconduct. Our seasoned investment fraud attorneys have recovered many millions of dollars on behalf of investors.
Of the thousands of clients we have represented in the years we have been in business, most of them have obtained total or partial financial recovery with our help. Contact SSEK Law Firm at (800) 259-9010 and ask for your free, initial case consultation.When a Broker Defrauds a Pension Fund
It is quite common for a pension fund to hire an investment firm and task them with managing the investing of the fund’s assets. This broker-dealer has a duty to only make investment recommendations that are suitable for the fund. The firm also must disclose all risks involved and refrain from making any misrepresentations about the financial products or trading strategies that they are marketing.
Unfortunately, there are brokers who will still offer: unsuitable investment recommendations to earn commissions, give bad investing advice, make omissions, or misappropriate funds. When this happens, it is not just the fund that suffers. All of its participants and their beneficiaries end up losing money, too.What Are Some Differences Between Private Pension Funds and Public Pension Funds?
Private pension fund plans are offered to employees by employers in the private sector. Public pension funds are for public sector employees, which today comprise the largest group with still active and growing pension funds.
Public pension plans are usually administered by local, state, or federal government entities. Unlike private funds, they are not subject to government regulation under the Employee Retirement Income Security Act of 1974 (ERISA). Instead, public pension funds must follow state rules.
It is against the law for financial advisors to give gifts, pay bribes, or issue kickbacks to fund officials to win the right to work with a pension fund. For example, in 2017, Ex-Sterne, Agee, and Leech broker and managing director Deborah Dickson Kelley pleaded guilty to securities fraud after taking part in a “pay-to-play” scam so as to work with the New York State Common Retirement Fund.
One of the largest pension funds in the country, it has $50B in state pension fund assets. According to prosecutors, Kelley bribed an official in order to direct business to her brokerage firm. This allowed her to earn hundreds of thousands of dollars in commissions.
Brokers are also not allowed to make stock trades based on confidential information about a pension fund and the investments it is making.
Brokerage firms can be held liable for losses sustained by a pension fund if their registered representative was the one who caused the financial harm. They may also be held accountable for carelessly investing a pension fund in a fraud, such as a Ponzi scam, especially if significant losses occurred.Savvy Pension Fund Fraud Lawyers Who Will Fight For You
SSEK Law Firm has the knowledge and resources to go after even the largest firms on Wall Street. Our team of pension fund attorneys has over 100 years worth of experience in securities law. We have successfully represented all kinds of institutional investors in Financial Industry Regulatory Authority (FINRA) arbitration, private arbitration, mediation, and in federal and state courts.