Corporate & Securities Law

401(k) plan participants know that they have suffered investment losses in their plans. But now, adding insult to injury, a new threat to their retirement security has arisen: fraud.

Over the past few months, the Department of Labor has launched almost 200 investigations into claims of 401(k) fraud, and already has issued 20 indictments. 

The $3 trillion 401(k) marketplace suffers from a chronic lack of oversight and a thin enforcement environment.  This creates opportunities for those to take advantage of the participants. Worse, the fraud that the Department of Labor tends to uncover only the most egregious violations, like instances of theft.

To protect themselves, 401(k) participants should be alert for warning signs that may suggest that something is not right.  The Department of Labor has issued their top 10 warning signs for retirement plan fraud:

Account statements are consistently coming late or at irregular intervals.

1. Account balance does not appear to be accurate.
2. Your employer failed to transmit your contribution to the plan on a timely basis.
3. A significant drop in account balance that is not explained by normal market fluctuations.
4. An account that shows a contribution that was not made from your paycheck.
5. Investments listed on your account are not what you authorized.
6. Unusual transactions in your account, such as loan to a company officer.
7. Frequent and unexplained changes in investment managers or products.
8. Trouble getting benefits paid on time or in correct amounts.

10.   An employer has recently struggled with operational cash flow.

If you participate in a 401(k) or other defined contribution retirement plan who has been or might have been victimized by retirement plan fraud, contact Jim Eccleston at the Eccleston Law Offices at 312-332-0000 to discuss your matter.