The SEC today announced that it investigated allegations that Retirement Systems of Alabama, Montgomery, used inside information to profit from the acquisition of The Liberty Corp. by Raycom Media Inc. in 2005.
The SEC did not fine or sanction fund executives. But the agency issued a report today publicizing its investigative findings and warning other public funds to put compliance programs into place to ensure they dont run afoul of securities laws.
According to an SEC news release, the $32 billion fund received advance notice of the acquisition because it had arranged to serve as a source of funding to Raycom for the deal. Liberty shares the fund acquired in August 2005 increased in value by more than $700,000 when information about the pending acquisition became public, the SEC said.
While public pension funds are exempt from most of the federal securities laws governing other money managers, they are not exempt from important anti-fraud provisions that prohibit insider trading and other manipulative and dishonest behavior that threatens the integrity of our markets, SEC Chairman Christopher Cox said in the release. It is vitally important, therefore, that they have appropriate policies and procedures.
The SEC realizes that we had no intention of doing anything that was violative of the law. Sometimes people trip, and this was a trip, said Tom Krebs, counsel to the retirement system.