In Solis v. Beacon Associates LLC, S.D.N.Y., No. 10-CV-8000, 10/21/10, the United States Department of Labor filed a lawsuit against New York investment management firms and their principals who gave advice to pension plans that invested with Bernie Madoff, causing many people to lose investments, and some to file bankruptcy.
The lawsuit alleged breach of fiduciary duties under ERISA when the firms recommended investments with Madoff's business when there were warnings that should have caused them to question Madoff's investments. The breach of fiduciary duties, caused dozens of ERISA plans to lose millions of dollars.
The United States Department of Labor lawsuit follows other lawsuits filed against the same defendants. In October 2010, a court provided a favorable ruling in a similar lawsuit, allowing for most ERISA breach of fiduciary duty claims.
The United States Department of Labor lawsuit requested the court to require the New York investment management firms and their principals to pay for plan losses and return fees and profits. The SEC demanded the court to permanently bar the defendants from serving as fiduciaries for ERISA plans.