We were asked by the Williams Mullen law firm in Richmond, Virginia to provide an article for their most recent Foreign Direct Investment Newsletter (see page 9 of the PDF at the bottom of the Williams Mullen page for the published result ).
Providing services for US subsidiaries of non-US multinational companies is one of our specialties as the cofounders of Diogenes have substantial experience in that arena.
Subsidiaries of non-US multinationals have a challenge when they buy or start companies in the US. Our ERISA laws covering employees are some of the strictest laws in the world; understanding ERISA is not easy for US executives to understand, much less non-American fiduciaries.
Recent breach of fiduciary cases involving non-US multinationals can be best illustrated by the Tibble v ABB case. In 2012, ABB, a Swiss multinational, was fined $35.2 million in settlement of a class action for failure to monitor the fees of their retirement funds. Had they been in conformance with global best practices, they would not have found themselves in this situation. Prominent US cases such as the Haddock vs. Nationwide lawsuit, which resulted in a $140 million settlement, believed to be the largest ever in a service-provider revenue-sharing lawsuit, illustrate the increasing scrutiny of plan trustee actions.
While being in conformance to the Global Fiduciary Standard of Excellence may not stop lawsuits from happening, conformance can substantially reduce the risk of being found guilty. As the SCOTUS made it clear in their Tibble v Edison decision, continuous monitoring of all aspects of a retirement plan is essential. Ongoing monitoring of and comparison to global best practices is the primary benefit of using our Diogenes Fiduciary Management System™.