DOL and GreatBanc Settle Valuation Lawsuit
Executive Director
The Department of Labor brought a 2012 suit against GreatBanc Trust Co., alleging that in 2006 it allowed the Sierra Aluminum ESOP to overpay for company shares. In the settlement, GreatBanc and its insurers will pay $5.3 million, including $4.8 million to the ESOP and $0.5 million in penalties.
The settlement also included standards that GreatBanc and the DOL negotiated, including how to select and monitor the appraisal firm, the scope of analysis required for the valuation, and documentation of the valuation. In reference to the agreement, James Staruck, the president of GreatBanc, said his company is "proud to be in the forefront of implementing what we consider to be an exceptional process." In a press release, the Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis Borzi said, "Others in the industry would do well to take notice of the protections put in place by this agreement."