The Fifth Circuit Court of Appeals has ruled that investment plan advisers cannot be held liable for plan losses as a result of an investment if they were not acting as a fiduciary for that investment, report Goodwin Proctor partners Daniel Condon, Alison Douglass and Jamie Fleckner.
In Tiblier v. Dlabal, an ERISA plan’s trustees entered into a management agreement with investment firm CACH Capital Management and its registered representative, Paul Dlabal. Within this agreement, CACH was granted limited discretionary authority over the plan’s investments and acted as the broker-dealer. The investment firm and Dlabal put forward several suggestions for investments, some of which the trustees rejected. One that was approved was a plan to purchase $100,000 in corporate bonds of oil and gas startup company Adageo Energy Partners—an investment that resulted in a commission for Dlabal, the Goodwin Proctor attorneys report.
