Steamfitters Local 449 filed suit June 11 against Austin Capital Management, claiming the firm breached its fiduciary duty under ERISA by investing in a feeder fund managed by Bernard L. Madoff Investment Securities.
The suit, filed in U.S. District Court in Pittsburgh on behalf of the union's $95.7 million pension fund, seeks class-action status. Also named as defendants are several Austin Capital executives; Austin's parent company, Victory Capital Management and its parent, KeyCorp, according to court filings.
Beginning in 2006, the Steamfitters' fund invested a total of $7.9 million in Austin's Safe Harbor Fund, which invested as much as 7.5% of its assets in the Rye Select Broad Market Fund managed by Madoff, according to court documents. The suit seeks restitution of losses and legal costs.
Austin Capital Management's funds were closed in April. Executives of the firm and Victory Capital and KeyCorp executives could not be reached by press time for comment.