Teachers Retirement System of the State of Illinois, Springfield, with $21.7 billion in defined benefit assets, is suing former manager Ark Asset. The suit, filed in Cook County Circuit Court, charges Ark with breach of contract, breach of fiduciary duty and violation of the Illinois Pension Code. System officials are seeking more than $67 million in damages. The suit claims Ark was notified on Oct. 29 that it was being terminated as a manager for TRS as of the close of business that day.
TRS officials claim that in the next six hours, Ark sold $579 million in equities. This was nearly 75% of the securities in the specialty growth portfolio it managed for the system without informing TRS officials.
The suit claims the selloff negatively affected the stock prices of the liquidated securities, and that Arks actions prevented fund staff from using the securities as part of a structured transition plan. Ark officials could not be reached by press time.