Strong (former UW TSA company) Settlements
Information regarding two separation actions regarding Strong is below. Strong was a provider with the UW TSA 403(b) Program through December 31, 2005.
Strong SEC Settlement Checks
The link to the website is http://strongsettlement.com/ .
UW TSA 403(b) Plan participants who invested with Strong may have received checks from the Security and Exchange (SEC) suit settlement. Several places on the website above, it is noted that unless participants are over 59 1/2, if they just cash the checks they may be subject to a 10% early withdrawal federal excise tax. HOWEVER -- please note: NO 1099-Rs will be issued for these checks. Strong settlement call center representatives note that they cannot give tax advice but that these checks are not considered a "distribution" by the IRS. Also, since there will be no 1099 issued for these, there is no way for the IRS to follow up on tax issues. Participants can generally cash these checks at any bank.
What should I do with my check? These monies do come from pre-tax investments, and participants may want to deposit the checks in their University of Wisconsin TSA accounts with their current investment company. These monies do NOT count toward this year's limits. UW TSA investment companies are able to deposit the checks the way they are currently made out. The participant should endorse the check on the back and write "For deposit with XYZ company – University of Wisconsin System 403(b) account." The companies' roll-in/ transfer-in paperwork should accompany the check.
Background information: The Securities and Exchange Commission (SEC) brought suit against Strong Capital Management on charges of market timing and frequent trading. The case was settled in 2004, the distribution plan was approved in 2009, and the distributions are now taking place. Participants who held Strong funds anytime between 1998 and 2003 in which market timing was an issue will receive a check.
The amount of the check from the SEC settlement is 14 times the amount of the calculated loss to the participant. The checks are made out to US Bank NA, Cust (custodian); participant's name 403(b); University of Wisconsin System. US Bank was Strong Capital Management's fiscal agent, custodian. Strong was acquired by Wells Fargo in 2005 and is no more -- therefore the checks could not be made out to Strong.
Since Wells Fargo is a completely separate company, they were not informed about the settlement checks. If participants need more info, they can call the settlement phone line listed on their paperwork or on the website ( 800-555-7718 ).
Strong Class Action Lawsuit Settlement
The Strong Class Action Lawsuit Settlement is separate from the Strong Securities Exchange Commission Settlement. Letters regarding the class action lawsuit have been sent to participants who invested with Strong at any time between January 1, 1999 and Dec . 31, 2004. Participants do not need to do anything unless they do not want to be part of the class action suit and settlement. (Usually only those who would like to sue independently choose not to be part of a class action lawsuit.) There will be hearings in October about whether the settlement amounts are fair. Checks will probably not be issued until much later in the year.