The plaintiffs are asking for $1 million in punitive damages.
THE VINDICATOR, YOUNGSTOWN
YOUNGSTOWN -- Seven employee 401(k) pension plans have filed suit against Second National Bank of Warren, saying the bank was negligent and reckless in managing their money and caused the plans to lose thousands of dollars.
The seven are asking Judge James C. Evans of Mahoning County Common Pleas Court to award them $1 million in punitive damages, plus compensation for the money lost, plus interest and attorneys' fees.
Plaintiffs include employee 401(k) plans for R.L. Lipton Distributing Co., R.L. Lipton Inc. dba Lipton Toyota, and R.L. Lipton Wholesalers, all of Boardman; Best Tobacco & amp; Candy, Mentor; Tri-County Wholesale Distributing, Youngstown; and Anchor Cigar & amp; Candy, Youngstown, which has two plans, for collective bargaining employees and salaried employees.
The traditional 401(k) plan, one of the most popular used by employers, allows employees to make payroll deferrals to be set aside for retirement or other purposes.
R.L. Blossom, chief executive of Second National Bank, declined to comment Tuesday, saying bank officials had just learned about the lawsuit and were still looking into it.
The suit states that Second National became an appointed successor trustee for each of the 401(k) plans April 1, 2000, and served in that capacity until the bank was terminated as a trustee June 29, 2001.
What's in suit
During that time, the lawsuit says, Second National provided "negligent investment management," improperly and unsuitably investing the 401(k) funds within common funds the bank had developed for investment purposes. It states that each of the 401(k) funds lost more than $25,000 because of the bank's performance.
The plaintiffs contend the bank failed to continuously monitor the accounts and failed to mitigate losses as their own internal management policies specify.
The lawsuit also says the bank committed fraud by making material misrepresentations regarding the state of the accounts.
It states that the bank breached its fiduciary duty by failing to act in the best interest of the 401(k) funds and that it was reckless in its investing, monitoring and supervision of the funds.
Besides the $1 million in punitive damages, the employee plans are asking Judge Evans to award each of them more than $25,000 to compensate their losses.
The lawsuit was filed by Atty. Gregg A. Rossi of Youngstown, who was out of town and unavailable to comment.