US - The $35bn Teachers' Retirement System (TRS) for the state of Illinois has filed a civil lawsuit against former TRS appointed trustee Stuart Levine accusing him of a "criminal breach of fiduciary duty.
The system, which serves over 330 000 members, also filed against former outside counsel Steven Loren, Loren’s former law firm Gardner, Carton & Douglas (Gardner) and Joseph Cari, a former partner and director of Heathpoint Capital, New York firm in which TRS previously invested.
The TRS is seeking compensatory damages from all defendants, including amount equal to any illegal “finder’s fees” or kickbacks that were paid as a result of the criminal conduct of Levine, Loren and Cari as well as “substantial” attorney fees paid to Gardner by the TRS during the time of the defendants’ criminal conduct.
Levine, Loren and Cari have already been criminally charged for their conduct by the federal government. Levine pleaded not guilty to the charges against him and will face trial in federal court this year. Loren and Cari have pleaded guilty to charges and are currently awaiting sentence.
“We want to recover all amounts TRS and our members are rightfully due as a result of this venal, criminal scheme,” remarked TRS executive director, Jon Bauman.
“When those specifically sworn to uphold that trust instead place their own interests ahead of the members of the fund, the penalties in out opinion should be significant.”
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.