Deals and People March 9, 2005

Indiana Taps New Pension Fund Chief

March 9, 2005 (PLANSPONSOR.com) - Officials at the state of Indiana's $11 billion public pension fund have tapped an entrepreneur who recently ran a venture selling cars on eBay as their new executive director.
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The new head of the Public Employees’ Retirement Fund (PERF) is David Adams, 43, who received the unanimous approval of the fund’s board of trustees as well as the blessing of Governor Mitch Daniels who has to approve such hiring by law, according to the Indianapolis Star.

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“David brings a wealth of experience and an entrepreneurial spirit to the fund,” Daniels said in a prepared statement.

Adams will have the day-to-day responsibility for safeguarding public employees’ money, getting pension checks out on time and dealing with customer service issues that arise.”This is an organization that is driven by customer service,” said Adams, who was also managing partner at a real estate firm. “I want to build upon the good work that’s been done.”

Leading this pension fund hasn’t been an easy job. Three ex-pension workers are in federal prison for separate crimes involving the fund (See Former PERF Worker Sentenced for Theft ), which unknowingly hired a convicted identity thief in 2001 for a top job. PERF is trying to clear up accounting problems uncovered by its own auditors and the State Board of Accounts, which found significant weaknesses in financial checks and balances (See Audit Finds 23 ‘Significant’ Problems at PERF ).

The fund is working to fix a flawed computer system that is full of inaccurate data on pensioners. Adams replaces Craig Hartzer, who was hired by the late Governor Frank O’Bannon, a Democrat, in the wake of the scandals.

Adams’ salary will be about $118,000. The fund serves more than 200,000 public employees, retirees and their families.

Administration March 8, 2005

Arthur Andersen Signs on to $25M Global Crossing Settlement

August 3, 2005 (PLANSPONSOR.com) - Now defunct auditor Arthur Andersen has settled an investor lawsuit about its role in the financial implosion of Global Crossing as part of a $25 million deal, plaintiffs' lawyers reported.
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The investors accused Global Crossing, a telecommunications network provider, its former officers and directors, and advisers of falsifying financial filings to hide losses, Reuters reported. The lead plaintiffs, the Public Employees Retirement System of Ohio and the State Teachers Retirement System of Ohio claimed they lost more than $110 million.

Global Crossing, founded by Gary Winnick, turned to a US Bankruptcy Court for protection from its creditors in January 2002 after struggling with too much debt and undersea fiber-optic cable capacity and amid doubts raised about its accounting practices. The company emerged from Bankruptcy Court in December 2003.

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Last March, Winnick and some former officers and directors agreed to pay $325 million to settle investor lawsuits (See  Global Crossing Settlement Gets Court OK ). The latest contributions brought the total recovery by shareholders and employees of Global Crossing to $425 million, $345 million of that from the securities class action, the Grant & Eisenhofer law firm said.

Meanwhile, the federal judge overseeing the Global Crossing securities fraud class action has given approval to a $75 million settlement from Citigroup for its role as a Global Crossing financial adviser, the law firm said.

Citigroup, which was one of Global Crossing’s bankers, was accused of issuing inflated research reports and failing to disclose conflicts of interest.

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