Lo thinks FDIC could fail

The FDIC might fail, requiring a federal bailout, dragged down by the failure of regional banks with substantial commercial mortgage debt, Andrew W. Lo warned.

Mr. Lo, founder and chief investment strategist of AlphaSimplex Group and a finance professor at the Massachusetts Institute of Technology, said that a failure to restructure debt on Stuyvesant Town-Peter Cooper Village — the vast New York apartment complex — could cause New York banks holding its debt to collapse. The value of the property reportedly has dropped more than $3.2 billion since it was acquired in 2006 for $5.4 billion by Tishman Speyer Properties and partners.

Mr. Lo made his comments at a press briefing hosted by Natixis Global Asset Management, AlphaSimplex's parent company. The FDIC has proposed that banks prepay their assessments to the FDIC for the next three years, generating some $45 billion for the cash-strapped insurance fund.

Chrysler Group is asking for an ERISA exemption to allow the company to transfer a $4.59 billion promissory note and company securities to a union-operated VEBA to help advance the sale of the company to Fiat North America.

A Chrysler spokesman would only say the VEBA request was first made in May.

ERISA prohibits voluntary employees beneficiary association plans from holding a large percentage of plan assets as employer securities, but exemptions are sometimes granted to protect the interests of the plan participants. Gloria Della, a Labor Department spokeswoman, could not say whether the Labor Department would approve the exemption.

All private investment fund managers — including those in hedge funds, private equity and venture capital — would be required to register with the SEC under draft legislation proposed Oct. 1 by Rep. Paul E. Kanjorski, D-Pa.

Mr. Kanjorski issued draft discussion documents on his website for two proposed bill: the Private Fund Investment Advisers Registration Act and the Investor Protection Act, which would double the commission's funding for enforcement activities and create a new whistleblower reward program.

The registration legislation would mandate more rigorous record-keeping and disclosure requirements from managers.

Mr. Kanjorski is chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.

Norges Bank Investment Management, asset manager for the 2.522 trillion Norwegian kroner ($435 billion) Government Pension Fund-Global, Oslo, called for independent chairmen at four U.S. companies: Harris; Parker Hannifin; Cardinal Health; and Clorox.

“The roles of chairman of the board and CEO are fundamentally different and should not be held by the same person. There should be a clear division of the responsibilities between these positions to ensure a balance of power and authority on the board,” Anne Kvam, NBIM's global head of corporate governance, said in a news release.

Gary A. Amelio was named executive director of the $13.1 billion San Francisco City & County Employees' Retirement System, effective in November, according to a SFERS news release.

He succeeds Clare M. Murphy, who is retiring in January.

Mr. Amelio was international consultant to SunGard Omni, pension administration provider, and prior to that was president of retirement services at ULLICO, a union-owned financial services firm. From 2003 to 2007, he was executive director of the Federal Retirement Thrift Investment Board.

Ashland plans to make a voluntary contribution of $100 million in Ashland common stock to its Ashland Hercules Pension Plan. The plan was created when Ashland merged its plan with that of Hercules, which Ashland acquired in November 2008.

The contribution represents less than 4% of total shares outstanding. The defined benefit plan was valued at $1.42 billion as of June 30, according to Ashland's quarterly financial report.

Ashland spokesman Ken Gordon could not be reached for details.

Separately, Campbell Soup contributed $260 million to its U.S. pension plan so far this year and expects to contribute $18 million to its non-U.S. pension plans in the first quarter of 2010, according to the company's 10-K filing. Campbell's worldwide pension plans were valued at $1.4 billion as of Aug. 2, down from $1.85 billion at the end of 2008, according to the filing.

The $43.2 billion Pennsylvania Public Schools Employees' Retirement System hired Millennium and Pareto to run $1 billion each in active currency, confirmed spokeswoman Evelyn Tatkovski.

The two firms join FX Concepts as the system's active currency managers.

Two currency managers were terminated earlier this year for underperformance, according to the system's website. Ms. Tatkovski couldn't name them.

Separately, the system committed $250 million to the Sankaty Middle Market Opportunities Fund.

The American Academy of Actuaries will pay former academy president-elect Bruce Schobel $600,000 in return for an agreement that he will not pursue the position of president until after Dec. 31, 2010, confirmed academy spokesman Andrew Simonelli.

Mr. Schobel had filed a $1 million lawsuit Sept. 1 in U.S. District Court in Washington, claiming the academy board that removed him as president-elect in August sent out a letter that included “false and defamatory” information about him.

“While the academy remains confident of the validity and legality of the board's action, we believe the settlement serves the best interest of the academy, the actuarial profession and the public by avoiding the continuing expense and disruption of litigation,” Mr. Simonelli said in an interview.

“I think it's fair to say that Mr. Schobel was happy with the settlement,” Mr. Schobel's attorney, David S. Wachen, said in an interview. Mr. Schobel could not be reached by press time for comment.

Warren Hellman is stepping down as chairman of private equity firm Hellman & Friedman, which he co-founded, the company announced. Brian Powers, CEO, replaced Mr. Hellman as chairman, and Philip Hammarskjold managing director, succeeds Mr. Powers as CEO. Patrick Healy, managing director, was named deputy CEO.

NFL quarterback Michael Vick will repay at least $416,461 that the Labor Department said he took from a pension plan sponsored by a company he owned to help pay off debts tied to his 2007 dog-fighting conviction.

Mr. Vick, currently with the Philadelphia Eagles, was accused of making prohibited transfers from the pension plan of his celebrity marketing company, MV7, from March 7, 2007, to July 7, 2008. The repayment is part of a consent judgment he reached with the U.S. District Court in Newport News, Va.

The Labor Department accused Mr. Vick of using the plan money to partially pay criminal restitution and attorney fees, according to a Labor Department news release.

Labor Department spokeswoman Gloria Della said the case did not go trial and was resolved through consensual agreements. Neither of Mr. Vick's attorneys, Paul K. Campsen and Michael Blumenthal, could be reached for comment by press time.