The U.S. Department of Labor is suing the former chairman of Westra Construction Inc., claiming he misled pension plan trustees to invest in Westra stock.
Westra Construction, Waupun, closed July 2005 after its bonding company, CNA Surety Co., refused to provide bonds for company projects, according to a lawsuit filed last week in federal court for the Eastern District of Wisconsin.
In an effort to save the company, Steven Westra, former chairman, withheld information about the company’s financial problems from consultants hired to lead the pension program, according to the lawsuit. Those consultants then advised the trustees who invested in Westra.
CNA Surety bond agents in October 2003 said the firm would issue bonds only if Westra sold $4 million of its stock, according to the lawsuit. Steven Westra, according to the lawsuit, encouraged the pension program trustees to buy the company stock that month.
When Westra Construction closed, the $4 million in stock was worthless, according to the lawsuit.