(AP) — The federal labor department is suing to protect West Virginia steelworkers who may have lost millions in retirement savings because investment managers hired by Severstal Wheeling failed to properly oversee the plan. "This case underscores the department's commitment to hold fiduciaries accountable when we believe they have failed to meet their obligation to protect plan assets," Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi said in a news release.
The federal lawsuit was filed Friday by the U.S. Labor Department in the Western District of Pennsylvania. It names three individuals -- Ronald Labow, Michael DiClemente, and Dennis Halpin -- and four companies connected to the plans. The lawsuit says investment managers hired by the company's retirement committee made no effort to diversify more than $31 million between Nov. 3, 2008, and May 19, 2009. By the time they did, the plans lost more than $7 million. The lawsuit asks that the defendants appoint an independent fiduciary to oversee the plans, and to restore losses, including "interest or lost opportunity costs, which were caused by their fiduciary misconduct."
The case was investigated by the Philadelphia regional office of the U.S. Employee Benefits Security Administration.
Severstal is no longer in business. The company sold Wheeling-Pittsburgh Steel mills to Russian steelmaker Renco group in 2011. The company then sold facilities in Ohio and Michigan to Steel Dynamics, Inc. and AK Steel Corporation in September.