A federal judge for the first time has certified a Taft-Hartley pension fund as a class representative in a securities fraud lawsuit.
Judge William Acker of the U.S. District Court for the Northern District of Alabama ruled that the Pointers Cleaners and Caulkers Local 1 Pension Fund, Rego Park, N.Y., could act as one of three class representatives in a federal securities fraud lawsuit pending against Vesta Insurance Group.
Vesta was sued by a number of shareholders in June and July 1998, after the company announced it was investigating "possible accounting irregularities" and that its president and CEO had resigned. Subsequently, the company restated its financial results for a three-year period, resulting in a downward adjustment of revenue by $176.4 million and of net income by $61.9 million.
Banks to merge funds
SunTrust Bank and Crestar Financial will merge their defined contribution and defined benefit plans Jan. 1, said Donna Lange, benefits manager at SunTrust.
The new $1 billion pension fund and $1.5 billion defined contribution plan will continue to use internally managed mutual funds. SunTrust's assets comprise about two-thirds of the new plans, Ms. Lange said.
Cash balance for Genesis
Genesis Worldwide executives plan to terminate its $34 million in salaried and non-bargaining hourly pension plans and form a cash balance plan.
Richard E. Clemens, president and CEO, said Genesis Worldwide is expected to receive approximately $10 million, after distribution to plan participants, which will be used to repay its bank indebtedness.
Approximately $17 million will be paid out to plan participants; $4 million to a trust to be used to pay benefits under the replacement cash balance plan; and $3 million to pay excise taxes incurred because of the termination.
Incumbent Frank Russell will likely continue as a fund-of-funds manager for the cash balance plan, Mr. Clemens said.
Pensions as money losers
Employer-sponsored pension plans will continue to be the biggest money loser for the federal government for the five years ended 2004, according to new estimates from the Joint Committee of Taxation.
Because of their tax-favored status and employers' ability to deduct contributions, the government will forgo $416 billion in taxes over the next five years, a new committee report estimates. Additionally, the government will forgo $70.7 billion in taxes on individual retirement accounts and another $26.1 billion on KEOGH retirement plans for small employers.
Endowment taps Brown
The $600 million endowment fund for the Archdiocese of Los Angeles selected Brown Capital Management to run $10 million in domestic small-cap growth stocks. Asset Strategy Consultants assisted.
Money manager taps CEO
Randall C. Hampton was named CEO of ABN AMRO Asset Management (USA), effective Jan. 1. He replaces James B. Wynsma, who will serve as chairman.
Mr. Hampton joined the company in 1997 as executive vice president of institutional trust services for LaSalle Bank's trust and asset management group. He will keep these responsibilities, but will focus attention on leading investment management operations.
Aeltus buys piece of firm
Aeltus Investment Management will acquire 25%of Elijah Asset Management by year end. Terms were not disclosed.
Elijah, a growth and technology stock manager with about $1 billion under management, will subadvise some Aeltus retail and variable-annuity products and may eventually subadvise some funds sold under the Aetna name. Aeltus also may use Elijah to provide some institutional investment management vehicles.
Meredith Brooks was named managing director of institutional investment services by Frank Russell, a new position.
Ms. Brooks will be based in New York, where she will have oversight of the $31 billion Frank Russell administers in institutional manager-of-managers funds.
Ms. Brooks most recently was managing director of Russell's Australian business, based in Sydney, where she was replaced by Alan Schoenheimer.
INVESCO's Lesavoy leaves
Nina Lesavoy will join PlanSponsorExchange.com as head of sales, marketing and client services, a new position, in early February. She is managing director at INVESCO in charge of institutional media relations and the firm's Internet strategy. The Internet role has been filled internally; the firm will seek a new press expert.
LIFFE announced its financial option contracts will trade exclusively on the Exchange's electronic trading system LIFFE CONNECT as of May 2.
Floor-based trading in financial options will be discontinued after April 28.
Equity trader hired
John Baker Jr. has joined Putnam, Lovell, de Guardiola & Thornton as head of equity trading, a new position based in the firm's New York office.
Mr. Baker's appointment is part of Putnam, Lovell's planned expansion of its equity trading business in 2000, according to Donald Putnam, CEO. Mr. Baker will work closely with Francis Mullen, head of equity sales, and both will handle the tripling in the company's sales and trading staff next year.
Most recently, Mr. Baker was a partner in Meyer Duffey Venture Funds.
Warning from treasuruer
Colorado State Treasurer Mike Coffman warned that public pension funds could inadvertently aid in modernizing and developing Chinese military capabilities when they invest in certain Chinese businesses.
Mr. Coffman is calling for the state to develop a clear written investment policy that would prohibit public pension funds from making investments in Chinese defense-related industries.
He noted that the $28 billion Public Employees' Retirement Association of Colorado has holdings in Chinese companies totaling $42 million. "There are dozens of other public pension funds in Colorado that could accidentally be investing millions to support China's military development. Until the federal government creates a policy on this, Colorado must take the initiative," Mr. Coffman said in a statement.
Crabbe rejoins CSAM
Leland Crabbe has rejoined Credit Suisse Asset Management as global head of emerging market debt.
In June, Mr. Crabbe was one of a handful of staffers to leave CSAM to join CIGNA Investments, where he was a portfolio manager in the global fixed-income group. He said he made the change back to CSAM because he wanted to focus on emerging market debt.
He has not been replaced yet at CIGNA, a spokesman said.
NWQ gets COO
Michael Mendez was promoted to president and the newly created position of chief operating officer at NWQ Investment Management. Previously, Mr. Mendez had been a managing director with the firm, said Howard Monaghan, a spokesman.
David Polak, who has been president of NWQ since it was founded in 1982, will remain chairman and chief investment officer.
LJH hires marketer
George Gowdey Jr. was hired by LJH Global Investments as vice president of marketing and new business development, a new position, said Paul McKean, executive vice president.
Mr. Gowdey had been a new business development specialist at Twenty-First Securities.
Help building utility
Global Straight Through Processing Association has chosen vendors to build and operate its cross-border trade-matching utility.
The firms selected are Depository Trust and Clearing; IBM; SegaInterSettle; S.W.I.F.T.; and TKS Teknosoft SA/TATA Consultancy Services.
The cross-border trading model will be a trading network and a transaction flow manager to facilitate and control the flow of information from post-trade to pre-settlement.
The system would be used by investment managers, broker/dealers and global custodians.
Pioneer gets new staffer
Robert Emmett Mullin Jr. was named director, consultant relations, for Pioneer Investment Management. Previously, he served as director of consultant relations for MetLife Investment Services.
Volume tops 1.2 million
State Street Global Advisors announced its Select Sector SPDR funds traded an average daily volume of more than 1.2 million shares during their first year of trading.
Select Sector SPDRs are exchange-traded funds that "unbundle" the S&P 500 index into nine sector funds comprising shares of S&P 500 companies that can each be bought and sold like shares of stock.
SSgA, which advises the funds, collaborated with Merrill Lynch and the American Stock Exchange to launch the nine funds Dec. 22, 1998.
Shares of the funds trade as part of the Amex's Index Share Marketplace. Amex also trades options on shares of Select Sector SPDR Funds.
Each Select Sector SPDR fund is designed to track the price performance and dividend yield net of expenses of a particular Select Sector index. The nine sectors are basic industries, consumer services, consumer staples, cyclical/transportation, energy, financial, industrial, technology and utilities.