pension, union, securities law, Securities Act of 1933, Securities Exchange Act of 1934, involuntary and noncontributory pension plans, antifraud
In this case note, Peter J. Kurshan analyzes Daniel v. International Brotherhood of Teamsters, 410 F. Supp. 541 (N.D. Ill. 1976), appeal docketed, No. 76-1855 (7th Cir. April 29, 1976). Plaintiff union member John Daniel was denied the right to receive union pension benefits after working for twenty-two and one half years. The trustees of the Local 705 Fund denied the benefits because Daniel's employment was not continuous. They contended that Daniel did not meet the conditions of the union pension plan, since he had been laid off involuntarily for several months. As a result, Daniel brought a class action under the antifraud provisions of the federal securities laws on behalf of all present and past Teamster members against the trustees of Local 705 pension plan, Local 705, certain Local officers and the International Brotherhood of Teamsters. Daniel alleged that defendants had violated section 17a of the Securities Act of 1933 (Securities Act) and section 10b of the Securities Exchange Act of 1934 (Exchange Act), in the offer and sale of interests in their pension fund. The district court in Daniel v. International Brotherhood of Teamsters agreed with plaintiff that an investment in a pension fund constitutes the sale of a security as defined by the securities laws, and that a private cause of action can be successfully litigated under the antifraud provisions of those laws. The court conceded that the securities laws provide no explicit answer to whether involuntary and noncontributory pension plans involve the sale of a security, but it found no statutory language prohibiting the application of these laws to pension funds.
Peter J. Kurshan,
Case Note: Securities Law - Pensions - An Involuntary Noncontributory Employee Pension Fund is a "Security" Under the Federal Securities Laws,
5 Fordham Urb. L.J. 591
Available at: https://ir.lawnet.fordham.edu/ulj/vol5/iss3/12