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Southeastern Economic Development Corp. (SEDC), a smaller cousin of the all-powerful Centre City Development Corp., is trying to recover money from outside service providers that allegedly fouled up its 403(b) pension plan. A 403(b) is a tax-advantaged plan that has some similarities with a 401(k) plan. SEDC "discovered a couple of years ago, really coincidentally, that their 403(b) plan, the employee pension plan created in 1992, had a bunch of problems and was not in compliance with the [Internal Revenue Service] code," says Michael Conger, the attorney who is representing SEDC. "They fixed the problems and hired me to recover the costs to fix the plan from the vendors." SEDC has settled with James Kerr of Kerr & Associates for $75,000.
The big defendant is Wall Street's Morgan Stanley, which, like the other three defendants, is fighting the charges. Conger feels that Morgan is liable for $300,000 to $500,000 for letting some employees trade on margin, which is not permissible in such plans, says Conger. Also, Morgan Stanley picked some investments that are not permissible in 403(b) plans, he says.
Macias Gini & O'Connell, which is the City's outside auditing firm, charged SEDC $250,000 for four years of auditing, says Conger. SEDC wants the entire sum back. Brownell & Duffey audited the 403(b) program and did not find the errors, charges the suit. There will be a routine hearing Friday on the suit, which is being heard in Superior Court by Judge Lisa Foster. The trial date has not been set.
Southeastern Economic Development Corp. (SEDC), a smaller cousin of the all-powerful Centre City Development Corp., is trying to recover money from outside service providers that allegedly fouled up its 403(b) pension plan. A 403(b) is a tax-advantaged plan that has some similarities with a 401(k) plan. SEDC "discovered a couple of years ago, really coincidentally, that their 403(b) plan, the employee pension plan created in 1992, had a bunch of problems and was not in compliance with the [Internal Revenue Service] code," says Michael Conger, the attorney who is representing SEDC. "They fixed the problems and hired me to recover the costs to fix the plan from the vendors." SEDC has settled with James Kerr of Kerr & Associates for $75,000.
The big defendant is Wall Street's Morgan Stanley, which, like the other three defendants, is fighting the charges. Conger feels that Morgan is liable for $300,000 to $500,000 for letting some employees trade on margin, which is not permissible in such plans, says Conger. Also, Morgan Stanley picked some investments that are not permissible in 403(b) plans, he says.
Macias Gini & O'Connell, which is the City's outside auditing firm, charged SEDC $250,000 for four years of auditing, says Conger. SEDC wants the entire sum back. Brownell & Duffey audited the 403(b) program and did not find the errors, charges the suit. There will be a routine hearing Friday on the suit, which is being heard in Superior Court by Judge Lisa Foster. The trial date has not been set.