5 August 2007 at 4:13:24 PM
Gee. Not enough to be under SEC scrutiny. Not enough to be accused in the State of Kentucky for failing to do minimal inspection work. Good enough for Texas!
Texas pension funds rely increasingly on outside consultants to handle complex investments, and one plan used advisers who faced accusations of misconduct by federal regulators and officials in other states.
The Employees Retirement System of Texas, a $24 billion pension fund for state workers, uses two consultants who have run into trouble with regulators, including one that paid a $2.2 million fine, the Austin American-Statesman reported in Sunday's editions.
The Securities and Exchange Commission had begun an informal inquiry into consultant Joseph Frohna when the Texas employee fund hired him and his firm, Cortina Asset Management in 2005. Frohna managed a portfolio of stocks for the fund until recently.
On Friday, the SEC said it had sued Frohna for insider trading in 2002 and that he had agreed to pay a $2.2 million fine.
Kathy Reissman, chief investment officer of the pension fund, said officials didn't know Frohna was under SEC scrutiny, although the probe was reported in the media.
Gee! Who can expect the State of Texas to do a news google search on the consultants they pay? Tsk!
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