A $455,000 settlement has been reached in a case involving a Tennessee-based trucking company's Employee Stock Ownership Plan (ESOP) following an investigation centered around the carrier's former owner, who also served as its chief financial officer, as well as the company's former ESOP trustee.
In his decision, U.S. District Court Judge Thomas A. Varlan ordered Stephen Thompson, former ESOP trustee of Big G Express Inc. of Shelbyville, Tennessee, and David Nolan, former owner and chief financial officer of Big G Express, to also pay a civil penalty of $45,454.
Big G Express did not respond to FreightWaves' request for comment regarding the settlement.
According to the Federal Motor Carrier Safety Administration's SAFER website, Big G Express has 543 power units and 530 drivers.
The consent judgment follows an investigation by the U.S. Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) that found that both Thompson and Nolan, acting as fiduciaries for the ESOP, "caused the plan to pay more than fair market value when it purchased Big G Express common stock from Nolan and other shareholders."
In addition to his fine, Thompson is banned from serving as a fiduciary, trustee or service provider to any Employee Retirement Income Security Act (ERISA) plan. The judge also ordered Nolan to complete 12 hours of fiduciary training within 12 months of his appointment as a fiduciary or service provider to any employee benefit plan, according to the DOL release.
The case, filed in U.S. District Court for the Eastern District of Tennessee in November 2017, stemmed from the purchase of shares of stock in October 2009 from the four shareholders and original owners of Big G Express by the company's employees through an ESOP.
The DOL investigation alleged there were multiple accounting errors in the appraisal that was performed by a Nashville, Tennessee- based company, and that Nolan, as a fiduciary to the ESOP, "failed to seek clarification regarding the multiple errors in the appraisal during his review."
Court documents alleged, "The valuation was unreliable and grossly inflated the value of the company's shares."