Financial adviser Capstone Advisory Group LLC and Robert Manzo settled with the U.S. Justice Department, and agreed to forgo a part of their fees in the bankruptcy of investment management firm GSC Group Inc., Reuters reported yesterday. A U.S. Trustee was seeking to void the firm's fees due to the mischaracterization of Robert Manzo—a Capstone contractor who was presented to the bankruptcy court as a direct employee—that may have helped in inflating fees. Under the settlement agreement, Capstone admitted that it erroneously described Manzo as an employee of Capstone through RJM LLC and agreed to pay $1 million to the GSC estate by withdrawing its final fee application of $2.75 million, and giving up about $635,000 that it was paid as compensation.
