BOSTON - The boards of directors of The New England Mutual Life Insurance and its subsidiary, Copley Real Estate Advisors, approved an out-of-court settlement with the $25 billion Washington State Investment Board, Olympia.
Washington's trustees approved the settlement last month, which requires The New England to pay $190 million to the pension fund. The pension fund would return its interest in the real estate partnership that was at the center of the dispute, which is valued at $50 million, according to a Washington official.
Washington sued The New England three years ago, alleging the insurer engaged in self-dealing because it held loans on the properties at the time Copley acquired them for the partnerships.
Job Shop ex-owner
must repay 401(k) plan
HAUPPAUGE, N.Y. - The Department of Labor scored a victory in the largest 401(k) fraud case it ever had filed.
Ralph Corace, the former owner of Job Shop Technical Services Inc., Farmingdale, N.Y., pleaded guilty in federal court in Hauppauge earlier this month to embezzling $2.7 million from his workers' $4.3 million 401(k) plan.
Mr. Corace agreed to pay what he embezzled as trustee to the plan; he still faces a maximum penalty of five years in prison and a $250,000 fine. The $2.7 million represented contributions from 300 of 755 participants.
In a separate civil suit still pending, the Labor Department is seeking restoration of all plan losses and wants to bar Mr. Corace from serving and the Job Shop from offering any plans covered by the Employee Retirement Income Security Act.Virginia Retirement eyes
private equity, realty deals
RICHMOND, Va. - The investment advisory committee of the $21.7 billion Virginia Retirement System recommended the board invest an additional $60 million in small-company private equity through Madison Dearborn Capital Partners.
Bill Sullivan, a VRS spokesman, said the fund already has $40 million invested with the venture capital firm.
Brinson Partners, the fund's private equity consultant, had recommended the additional allocation.
Also, the pension fund's real estate advisory committee recommended two new investments. The first investment is a $28 million allocation to Mezzanine Capital Property Investors for a new private real estate investment trust. The panel also recommended a $60 million allocation to Prudential Real Estate for reconditioned apartments.
Mr. Sullivan did not know how the new investments will be funded.
The board will act on the recommendations in August.
Indiana Teachers
drops manager
INDIANAPOLIS - The $3.1 billion Indiana State Teachers Retirement System terminated Alpha Capital Management, said Robert Newland, investment officer. Alpha had run about $13 million.
The fund is seeking indications of interest from potential managers to succeed Alpha, especially from minority- or woman-owned firms.
County fund may change
international manager's fee
SAN BERNARDINO, Calif. - The $2.3 billion San Bernardino County Employees' Association is asking Boston International Advisors to replace its asset-based fee with a performance fee.
Boston International manages about $185 million for the pension fund in international equities.
The fee change proposal was prompted by concerns of fund officials about investment performance, according to a spokesman for the fund.
