F&M Trust finalizes $10M agreement in class-action suit
Chambersburg-based F&M Trust Co. said it finalized a settlement agreement in a class-action lawsuit arising from a trust company it bought in 2008, according to a filing with the U.S. Securities and Exchange Commission.
A tentative settlement agreement calls on F&M Trust to pay $10 million to resolve all claims arising or potentially arising from the issue, according to the agreement.
A hearing for preliminary approval of the agreement is scheduled for May 4, according to the SEC filing.
F&M Trust recognized the settlement payment as an expense in the fourth quarter of 2017 and said it expects to fund the payment out of "available resources," the filing said. The settlement is not an admission of wrongdoing on the bank's part.
F&M spokesman Matt Weaver said the company did not have any additional information to provide beyond what was in the SEC filing.
The suit, filed in 2015 in federal court, alleged that Community Trust Co., which F&M Trust acquired in 2008, and F&M Trust did not exercise proper oversight of funds they held between 2002 and 2010 on behalf of employee-benefit plans created by an independent lawyer.
The plans covered over 500 participants and included employer-owned life insurance policies for company principals and employees.
Those participants are the class covered by the settlement with F&M Trust.
F&M is a subsidiary of Franklin Financial Services Corp. The bank has assets of approximately $1 billion and operates 22 branches throughout Central Pennsylvania.