Florida State Board sells MF Global holdings
Florida State Board of Administration, Tallahassee, sold all its 137,453 shares in MF Global Holdings Ltd. at 12 cents a share, according to John Kuczwanski, communications manager of the $146 billion FSBA.
The sale on Tuesday was triggered by Russell Investments’ removal of MF Global from the Russell 3000 index, Mr. Kuczwanski said in an e-mail. The shares were held in an internally managed Russell 3000 index fund.
Russell Investments removed MF Global from the Russell 3000 and other Russell indexes Nov. 3, Katherine Stouffer, Russell communications manager, said in an e-mail.
MF Global filed for Chapter 11 bankruptcy protection Oct. 31 in U.S. Bankruptcy Court in New York. The New York Stock Exchange suspended trading in the company's stock Nov. 1.
The eventual sale “was just a matter of timing,” Mr. Kuczwanski said in an interview.
The $119.2 billion Florida Retirement System defined benefit fund had its 133,964 shares in a $1.3 billion Russell 3000 fund. The $711.1 million Lawton Chiles Endowment Fund had 3,489 shares. The FSBA oversees both funds.
“Given the total value held by the (FSBA) when this topic hit the news was at $165,000.00, we would not take legal action,” Mr. Kuczwanski wrote in the e-mail. “However, if a class-action suit were to be filed, we would not opt out.”
Fidelity Investments held 8.8 million shares, or 5.3%, of MF Global, as of Oct. 31, according to a 13G filing with the Securities and Exchange Commission, said Jenny Engle, Fidelity spokeswoman.
As of Sept. 30, the majority of Fidelity's equity portfolios, across all its mutual funds and other investment platforms, such as Pyramis Global Advisors, didn't hold MF Global stock, Ms. Engle said.
Among the Fidelity portfolios that held MF Global, none of the holdings exceeded 1.32% of the portfolio's net asset value. The portfolios holding the stock are both actively and passively managed, she added.
“We don't expect developments at the company to have a significant effect on performance,” Ms. Engle added.
Fidelity officials declined to comment on whether they have sold any of the stock or would take any securities litigation action, Ms. Engle said.
“We are monitoring the situation,” Ms. Engle added.
TIAA-CREF held 10.9 million MF Global shares, or 6.6% of the stock, also as of June 15, according to the proxy statement.
TIAA-CREF officials declined to comment, Chad Peterson, director of media relations, said in an e-mail.
The $229.4 billion California Public Employees' Retirement System, Sacramento, held 286,631 MF Global shares, as of Oct. 31, Wayne Davis, CalPERS information officer, said in an e-mail. The shares were all in internally managed index funds. CalPERS officials declined to comment on whether the retirement system took any action on its MF Global shares or about the index funds.
“None of our index portfolios are purely passive, meaning that we always have discretion (within limits, of course) to go outside of perfect index weights,” Mr. Davis wrote in the e-mail. “We never allow ourselves to be a ‘slave to the index,' but rather are always on the lookout for both opportunities and landmines to improve performance in managing our portfolios.”