Core of Corruption… the Principal Group of Companies

Core of Corruption

Core of Corruption… the Principal Group of Companies…

My previous post discussed fake litigation and aggregate settlements… a topic few investors have knowledge of, yet adds still another level of corruption to an already existing consortium of legal misfits.  This post will expand on my previous topic, illustrating how companies like Principal operate openly in the legal community with no concern for compliance within legal guidelines for ethical conduct.

Law firms alleging to represent legitimate plaintiffs in ERISA related cases are often simply co-conspirators… these class action cases can continue for years, until the statute of limitations nearly expires, followed by the judge’s decision not certify the class.  Soon thereafter, a settlement offer follows, and plaintiff’s counsel forces litigants through coercion to accept an aggregate settlement based on a fictitious “negotiated” settlement.

Fake litigation involving an ERISA related case…

Mullaney v. Principal Life Insurance Company, et al, was originally filed in the U.S. District Court,FAKE LITIGATION Southern District of New York, on December 4, 2009, Mullaney was later represented by the law firm of Keller Rohrback, LLP.  Of notable interest, two days earlier, on December 2, 2009, another case, Cruise v. Principal Life Insurance company, et al, was filed in the same district court. Both filings were drafted on the same date, December 2, 2009, by the same author, presumably Principal attorneys; the complaints were identical, even though from two unrelated law firms..  Wolf Popper LLP represented Cruise, and Keller Rohrback LLP represented Mullaney.  Both plaintiffs lived in New York.  As an example of identical drafting, I have included paragraph #6 of both complaints below.  With the exception of the plaintiff names, the script is identical. 

Each plaintiff worked for unrelated companies, but both companies did have Principal for a service provider.  But the cash balances found in the Principal US Property Separate Account for both companies were minimal in 2008.  Mullaney, working for Judicial Title Insurance Agency in New York, probably had less than a $3,000 balance, with damages less than $1,500.00.

fake litigationfake litigationCruise, working for the Rogers Fence Company, would have had less than $5,000 invested in the fund, and would have lost no more than $2,500.

So we have two lead litigants, filing identically worded lawsuits against the nation’s largest provider of 401(k) plans, represented by multiple law firms from New York, Arizona, and Seattle, suing to recover damages of less than $5,000!

This is definitely prima facie evidence of a fake lawsuit, initiated by Principal, who, in all likelihood, wrote the complaints, hired the law firms to initiate litigation with an intent to mitigate risk exposure on a potential multi-billion dollar lawsuit that should have been filed by hundreds of thousands of investors.  I don’t know the litigants involved, and don’t know whether these activities were initiated without their knowledge.

Before the aggregate settlement was reached through fake negotiations, the Iowa Southern District Court Judge refused to certify the class action.  There were a total of 89 plaintiffs that ultimately were offered meager settlements by Principal.  I don’t know the exact number that actually accepted the offers.  The protocol followed by Keller Rohrback in reporting the aggregate settlement violated every ethics rule as defined by the American Bar Association. 

First of all, I was intimidated by Keller Rohrback when I declined to accept what they called a fair and reasonable offer.  I was told this was an “all or nothing” offer by Principal; my refusal to accept their offer would cause the offer to become null and void, and none of the remaining plaintiffs would receive a settlement.

Immediately following my continued refusal to accept Principal’s settlement offer, Keller Rohrback sent me a dis-engagement letter, advising me they no longer represented me.

Finally, I was told I had signed a confidentiality agreement, and any disclosure of the above facts would result in Keller-Rohrback suing me for a breach of contract and/or confidentiality.

The activities outlined above violate every standard of ethics under the American Bar Association rules of ethical behavior.  Worse yet, if there was collusion or a conspiracy between these law firms and Principal, as I believe there was, this activity should be investigated by the Department of Justice.

res ipsa loquitur, the thing speaks for itself. …

As further evidence of collusion and a fake lawsuit, one simply has to review the Brightscope retirement statistical website for the year 2008, when the Principal U.S. Property Separate Account was frozen.  There were eight lead litigants, all of which allegedly had a 401(k) with Principal through their employers or affiliations.  After reviewing the statistics for the eight 401(k) plans, the following totals surfaced. 

The eight plans had a total of 5,718 active plan participants with account balances, invested in all plans.  Those plans had a total of $14,482,425 in the PUSPSA, an average of $2,533 per plan participant.  Each participant lost approximately 50% of value in the fund during 2008 and 2009, amounting to an average loss of $1,266 per participant.

Based on these averages, the eight lead plaintiffs lost a combined total of $10,128, hardly enough to file a class action lawsuit.  Considering the fact there were a total of 12 lawyers representing five of those eight litigants, the average claim value per lawyer would be $527.50 per litigant.  Three of the remaining litigants represented themselves (Pro Se).

The legal doctrine under which I can allege this lawsuit was faked by Principal in collusion with at least four other law firms is the doctrine of “res ipsa loquitur”… Latin for “the thing speaks for itself.” …

  • No attorney would accept a case involving total gross damages of $527… no attorney would even write a letter for that fee amount.
  • Secondly, the representing law firm always drafts their own complaint.  The two drafted complaints in this case read identical, which means they had one author… Principal Life Insurance Company.
  • The class certification of this case was intentionally delayed to force a settlement and cause the statute of limitations to expire, leaving hundreds of thousands of investors hoping to be a part of the class action without recourse.

The knowledge that there are attorneys willing to violate their fiduciary standard of conduct owed their client is appalling.  I believe, under the Trump administration, these concerns will be investigated, and those responsible will be prosecuted.  As hard working investors, we should demand nothing less than zero tolerance for this kind of criminal behavior.

If you lost even a dollar from the withdrawal freeze of contributions that you deposited into the Principal U.S. Property Separate Account in 2008, I am asking you to make a copy of this post and file it, with a complaint, with your local State Attorney General’s office, asking them to investigate on your behalf.  This is your right to be heard.

In my next post, I will illustrate another example of a fake filing of lawsuit by Principal to render themselves as non-fiduciaries… another worrisome account of our legal process at work.

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Author: Dennis Myhre

Mr. Myhre can be contacted at..... dmyhre@fiduciaryfactor.com