Failed lawsuit could cost Texas pension fund $1 million

[flashl]

Judge dismisses all $75 million in damage claims stemming from 2003 mutual fund scandal.

The Employees Retirement System of Texas's lawsuit against investment company Putnam LLC, which sought at least $75 million for damages rooted in a 2003 mutual fund industry scandal, has backfired and could cost the state worker pension fund nearly $1 million.

Travis County state District Judge Margaret Cooper this month said she would grant Putnam's motion to dismiss the pension fund's claims. Putnam's motion includes a claim for $796,096 in unpaid fees from the retirement system, plus interest of $162,397.

...

In granting Putnam's motion, Cooper rejected the retirement system's claim for damages, which included allegations that Putnam breached its fiduciary duty; that the fund should recover investment gains it would have earned had other advisers managed the money; and that Putnam should pay the employee fund's cost of moving the money Putnam had managed to other investment companies.

...

The fund hired Putnam in 2002 to manage part of its international portfolio but fired it the next year after two Putnam executives were exposed in a mutual fund scandal that focused on improper trading practices.

Statesman