The U.S. Department of Labor filed a lawsuit against a San Francisco bank and its directors alleging their mismanagement of the bank's Employee Stock Ownership Plan assets resulted in a $1.4 million loss.
The suit asks California Pacific Bank and its four plan fiduciaries be forced to pay back all the losses they incurred.
After terminating the ESOP in 2010, the fiduciaries violated the Employee Retirement Income Security Act by failing to liquidate and distribute plan assets in cash to plan participants as required, the DOL alleges. Because the bank isn't publicly traded, this left participants with shares of the company's stock they could not easily liquidate for cash, if at all.
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