City National Bank and its officers are in hot water with the Department of Labor, after the latter filed suit against fiduciaries of the City National Corp. Profit Sharing Plan over what it said were excessive fees arising out of "self-dealing and conflicted transactions involving plan assets" by those fiduciaries.

According to the DOL, an investigation conducted by the Employee Benefits Security Administration Los Angeles Regional Office revealed that, through the end of 2011, fiduciaries of the City National Corp. Profit Sharing Plan — Executive Vice President for Human Resources Marianne Lamutt; Chief Financial Officer Christopher Carey; Executive Vice President, General Counsel and Secretary Michael B. Cahill; and Senior Vice President and Manager Michael Nunnelee — and their affiliates received millions of dollars in compensation, commissions and fees at the expense of the plan.

Rather than outsource plan services to avoid potential conflicts of interest, or reimburse themselves for only direct expenses, City National Bank and other fiduciaries established compensation rates for the plan on par with those charged to the bank's retail clients. That meant they created conflicts that resulted in multiple breaches of the Employee Retirement Income Security Act.