Florida Enron pension trial underway

[JURIST] Florida Tuesday opened its case against Alliance Capital Management [corporate website], the company charged with investing the state's employee pension fund in plunging Enron stock. The Florida State Board of Administration [official website] alleges gross negligence, breach of contract and three other state charges stemming from the fund's $313 million dollar loss caused by continued investment in the troubled company. A fund attorney testified Tuesday that Alliance continued to buy stock even though its own analysts warned the company was about to "blow-up." Florida also alleges Alliance's portfolio manager failed to scrutinize Enron's finances and that the state was misled because Board member Frank Savage also sat on Enron's board. Alliance has denied any wrongdoing and is countersuing for $1.1 million in unpaid investment management fees. Florida had employed Alliance since 1984 and employed about 70 other companies to manage the state's $100 billion retirement fund. Florida's retirement fund was one of the most severely impacted by Enron's downfall; in comparison, Georgia lost $127 million and Arizona lost $35 million. AP has more.

 

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