Minnesota State Board of Investment, St. Paul, and T. Rowe Price Associates are taking lead roles in lawsuits against Mercury Finance, Mercury officials and KPMG Peat Marwick, Mercury's former auditor.
Minnesota is seeking about $5 million from Mercury over alleged accounting fraud through a class-action lawsuit, while T. Rowe Price is going it alone in a suit seeking $180 million in compensatory and punitive damages. Both suits were filed in U.S. District Court in Chicago.
Officials for Mercury and KPMG declined comment. Mercury executives are seeking some type of a reduced settlement, according to industry sources.
The Ohio Public Employees' Retirement System, Columbus, may join the class-action suit; the Florida State Board of Administration, Tallahassee, might file its own suit.
TCW Group might become the first money manager to provide specific investment advice to 401(k) plan participants while receiving a fee from the investments if the DOL, as expected, approves an exemption from ERISA prohibited transaction regulations.
TCW has proposed a ground-breaking program - using independent financial and behavioral finance experts. The outside experts would advise participants to direct their investments into one of four commingled trusts, which would invest in TCW's Galileo family of 13 mutual funds. Each trust's fund lineup would be determined by the outside academic expert designed to accommodate different investment strategies and risk tolerances. The advice on which trust to invest in would be based on personal information provided by participants.
Sources expect the TCW proposal to be approved by the end of September and serve as a model for others to follow.
Fronteras Fondo de Inversion Internacional, Santiago, Chile, named Draper & Kramer Realty Advisors to be the exclusive U.S. real estate investment adviser for the investment fund. Juan Ariztia, president of Fronteras, said the fund expects to raise $50 million for investments in non-Chilean real estate, to be invested in the U.S., Venezuela, Brazil and Argentina. Investment advisers for the Latin American countries have not yet been named.
Oklahoma Teachers' Retirement System, Oklahoma City, plans to issue RFPs for small-cap equity managers to invest about $200 million. Tom Beavers, executive director of the $3.6 billion fund, said about 20 firms will be asked to respond from more than 90 that earlier responded to the system's RFI. He said two or three managers would be selected, with a decision expected in October or November. Funding will come from rebalancing.